Vol. 78 Tuesday, 

No. 73 April 16, 2013 

Part III 

Department of Commerce 

Bureau of Industry and Security 

15 CFR Parts 730, 732, 734, et al. 

Department of State 

22 CFR Parts 120, 121, and 123 

Revisions to the Export Administration Regulations: Initial Implementation of 

Export Control Reform; Amendment to the International Traffic in Arms 

Regulations: Initial Implementation of Export Control Reform; Final Rules 

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22660 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

DEPARTMENT OF COMMERCE 

Bureau of Industry and Security 

15 CFR Parts 730, 732, 734, 736, 738, 

740, 742, 743, 744, 746, 748, 750, 756, 

758, 762, 764, 770, 772, and 774 

[Docket No. 120403246–2657–01] 

RIN 0694–AF65 

Revisions to the Export Administration 

Regulations: Initial Implementation of 

Export Control Reform 

AGENCY: Bureau of Industry and 

Security, Commerce. 

ACTION: Final rule. 

SUMMARY: As part of the Export Control 

Reform (ECR) Initiative, the Bureau of 

Industry and Security (BIS), and the 

Directorate of Defense Trade Controls 

(DDTC), Department of State, have 

published multiple proposed 

amendments to the Export 

Administration Regulations (EAR) and 

the International Traffic in Arms 

Regulations (ITAR), respectively, to 

strengthen national security by 

fundamentally reforming the export 

control system. This final rule 

implements the initial ECR changes by 

adding a structure and related 

provisions to control munitions items 

that the President has determined no 

longer warrant export control on the 

U.S. Munitions List (USML) on the 

Commerce Control List (CCL), 

specifically aircraft, gas turbine engines, 

and related items. This rule is being 

published in conjunction with a 

Department of State rule that revises the 

USML so that upon the effective date of 

both rules, the USML and CCL and 

corresponding regulatory structures will 

be complementary. The revisions in this 

final rule are also part of Commerce’s 

retrospective regulatory review plan 

under EO 13563, which Commerce 

completed in August 2011. 

DATES: Effective Date: This rule is 

effective October 15, 2013. 

ADDRESSES: Commerce’s full plan can be 

accessed at: http://open.commerce.gov/ 

news/2011/08/23/commerce-planretrospective-analysis-existing-rules. 

FOR FURTHER INFORMATION CONTACT: For 

general questions about the ‘‘600 series’’ 

control structure or transition related 

questions, contact Hillary Hess, 

Regulatory Policy Division, Office of 

Exporter Services, Bureau of Industry 

and Security, at 202–482–2440 or 

rpd2@bis.doc.gov. For technical 

questions about the ECCNs included in 

this rule contact Gene Christiansen, 

Office of National Security and 

Technology Transfer Controls, at 202– 

482–2984 or 

gene.christiansen@bis.doc.gov. For 

questions about the definition of 

‘‘specially designed,’’ contact Timothy 

Mooney, Regulatory Policy Division, 

Office of Exporter Services, Bureau of 

Industry and Security, at 202–482–2440 

or timothy.mooney@bis.doc.gov. 

SUPPLEMENTARY INFORMATION: This final 

rule implements the initial ECR changes 

by adding a structure and related 

provisions to control munitions items 

that the President has determined no 

longer warrant export control on the 

U.S. Munitions List (USML) on the 

Commerce Control List (CCL). In 

addition to adding this control 

structure, this rule creates ten new ‘‘600 

series’’ Export Control Classification 

Numbers (ECCNs) to control an initial 

tranche of items moving from the USML 

to the CCL: aircraft and gas turbine 

engines, related parts, components, 

accessories, attachments, software, and 

technology. 

This rule also adopts as much as 

possible a common definition of 

‘‘specially designed’’ for use under the 

EAR and the ITAR, along with other key 

terms used on the two control lists. In 

addition, this rule addresses 

implementation issues related to the 

transition of items from the USML to the 

CCL, including the continued use of 

DDTC-issued licenses that include items 

transferred to the CCL. 

This rule implements changes that 

were proposed in five rules published 

between July 15, 2011 and June 21, 2012 

under ECR. This rule is being published 

in conjunction with a Department of 

State rule that revises the USML so that 

upon the effective date of both rules, the 

USML and CCL and corresponding 

regulatory structures will be 

complementary. 

Contents 

I. The Export Control Reform Initiative 

A. Background 

B. List of Proposed Rules 

C. Relationship to Other Rules 

Implementing ECR 

II. Addition of the ‘‘600 series’’ to the CCL 

A. General Structure 

B. Reasons for Control 

C. Items Paragraph 

III. Transition 

A. Delayed Effective Date 

B. Amendment to the EAR To Address 

Dual Licensing 

C. Transition Period and General Order No. 

5 

IV. Retrospective Regulatory Review 

V. Part 730—General Information 

VI. Part 732—Steps for Using the EAR 

VII. Supplement No. 3 to Part 732—Red Flags 

VIII. Part 734—Scope of the EAR 

A. Dual Licensing 

B. De Minimis 

IX. Part 736—General Prohibitions 

A. Foreign-Produced Direct Product 

B. General Order No. 5 

X. Part 738—CCL Overview and the Country 

Chart 

XI. Part 740—License Exceptions 

A. Restrictions 

B. License Exception TMP 

C. License Exception RPL 

D. License Exception GOV 

E. License Exception TSU 

F. License Exception STA 

G. Other License Exception STA Changes 

H. Country Groups 

XII. Part 742—Control Policy 

A. National Security (NS) Review Policy 

B. Regional Stability (RS) License 

Requirements 

C. RS Review Policy 

XIII. Part 743—Special Reporting 

A. Conventional Arms 

B. Major Defense Equipment 

XIV. Part 744—End-User and End-Use 

Controls 

A. ‘‘Military End Use’’ in §§ 744.17 and 

744.21 

B. China Military End-Use Control 

XV. Part 746—Embargoes and Other Special 

Controls 

A. Iraq 

B. UN Embargoes 

XVI. Part 748—Applications and 

Documentation 

A. Classification Requests To Confirm That 

Items Are Not ‘‘Specially Designed’’ 

B. Unique Submission Requirements 

XVII. Part 750—Application Processing, 

Issuance, and Denial 

A. Calculating Processing Times 

B. Shipment to Approved End Users 

C. Extended Validity 

D. Specificity on Application 

XVIII. Part 756—Appeals 

XIX. Part 758—Export Clearance 

Requirements 

A. Automated Export System (AES) Filing 

Regardless of Value, Except for .y Items 

B. Furnishing of ECCNs to Consignees 

C. Removal of Obsolete References in 

Revised Sections 

XX. Part 762—Recordkeeping 

XXI. Part 764—Foreign-Produced Direct 

Product and Denial Orders 

XXII. Part 770—Interpretations 

XXIII. Part 772—Definitions (Including 

Specially Designed) 

A. ‘‘Specially Designed’’ Definition 

B. Other Definitions 

XXIV. Part 774—The Commerce Control List 

A. Product Group Headings 

B. ECCN 0A919 

C. Aircraft and Related Items ‘‘600 Series’’ 

ECCNs 

D. Gas Turbine Engines and Related Items 

‘‘600 Series’’ ECCNs 

E. 9Y018 ECCNs Rolled Into ‘‘600 Series’’ 

F. Supplement Nos. 6 and 7—Sensitive List 

and Very Sensitive List 

G. Supplement No. 4—Commerce Control 

List Order of Review 

XXV. Procedural Amendment—Authority 

Citation Update 

I. The Export Control Reform Initiative 

A. Background 

The objective of the Export Control 

Reform (ECR) Initiative is to protect and 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22661 

enhance U.S. national security interests. 

President Obama directed the 

Administration in August 2009 to 

conduct a broad-based review of the 

U.S. export control system to identify 

additional ways to enhance national 

security. In April 2010, then-Secretary 

of Defense Robert M. Gates, describing 

the initial results of that effort, 

explained that fundamental reform of 

the U.S. export control system is 

necessary to enhance national security. 

Once the International Traffic in Arms 

Regulations (ITAR) and its U.S. 

Munitions List (USML) are amended so 

that they control only the items that 

provide the United States with a critical 

military or intelligence advantage or 

otherwise warrant such controls, and 

the Export Administration Regulations 

(EAR) are amended to control military 

items that do not warrant USML 

controls, the U.S. export control system 

will enhance national security by (i) 

improving interoperability of U.S. 

military forces with allied countries, (ii) 

strengthening the U.S. industrial base 

by, among other things, reducing 

incentives for foreign manufacturers to 

design out and avoid U.S.-origin content 

and services, and (iii) allowing export 

control officials to focus government 

resources on transactions that pose 

greater concern. 

On July 15, 2011, BIS published 

Proposed Revisions to the Export 

Administration Regulations (EAR): 

Control of Items the President 

Determines No Longer Warrant Control 

under the United States Munitions List 

(USML) (76 FR 41958) (hereinafter ‘‘July 

15 (framework) rule’’). That rule 

proposed a regulatory framework to 

control items on the USML that, in 

accordance with section 38(f) of the 

Arms Export Control Act (AECA) (22 

U.S.C. 2778(f)(1)), the President 

determines no longer warrant export 

control under the AECA. These items 

would be controlled under the EAR 

once the congressional notification 

requirements of section 38(f) and 

corresponding amendments to the ITAR 

(22 CFR parts 120–130) and its USML 

and the EAR (15 CFR parts 730–774) 

and its Commerce Control List (CCL) are 

completed. 

After the July 15 (framework) rule 

proposed this regulatory framework, BIS 

published subsequent rules proposing 

specific changes to the CCL, and to 

other parts of the EAR. Among other 

rules, on June 21, 2012, BIS published 

Proposed Revisions to the Export 

Administration Regulations: 

Implementation of Export Control 

Reform; Revisions to License Exceptions 

After Retrospective Regulatory Review 

(77 FR 37524) (hereinafter ‘‘June 21 

(transition) rule’’). That rule proposed, 

inter alia, establishing a general order to 

facilitate the transition from ITAR to 

EAR licensing jurisdiction and 

broadening certain EAR license 

exceptions and licensing procedures to 

ensure they are not more restrictive than 

comparable ITAR exemptions and 

approvals. 

This final rule implements ECR by 

finalizing the provisions contained in 

five proposed rules published between 

July 15, 2011 and June 21, 2012, which 

adds to the CCL military aircraft, 

military gas turbine engines, and related 

items that the President has determined 

no longer warrant export control on the 

USML. The Department of State made 

the congressional notification required 

by Section 38(f) of the AECA for 

removal of these items from the USML. 

The majority of the revisions in this rule 

are specific to the munitions items that 

are transferred from the USML to the 

CCL; however, many revisions also 

affect items or transactions that were 

already subject to the EAR prior to the 

effective date of this rule. 

Rather than adding a new paragraph 

to § 734.3 for the Bureau of Alcohol, 

Tobacco, Firearms and Explosives 

(ATF), as proposed, BIS is adding a note 

to section 734.3(b)(1)(i) to clarify the 

delegations of authority between the 

Departments of State and Justice with 

respect to defense articles identified on 

the USML in the ITAR and the United 

States Munitions Import List (USMIL). 

BIS received no comments from the 

public on this issue. BIS does not 

believe that this change is substantive; 

rather it more accurately reflects the 

relationship between the USML in the 

ITAR and the United States Munitions 

Import List. 

B. List of Proposed Rules 

This rule implements amendments to 

the EAR proposed in the following five 

rules published between July 15, 2011 

and June 21, 2012 under ECR: 

• Proposed Revisions to the Export 

Administration Regulations (EAR): 

Control of Items the President 

Determines No Longer Warrant Control 

Under the United States Munitions List 

(USML), (, 76 FR 41958, July 15, 2011) 

(RIN 0694–AF17) (‘‘July 15 (framework) 

rule’’); 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Aircraft and Related Items 

the President Determines No Longer 

Warrant Control Under the United 

States Munitions List (USML), (76 FR 

68675, November 7, 2011) (RIN 0694– 

AF36) (‘‘November 7 (aircraft) rule’’); 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Gas Turbine Engines and 

Related Items the President Determines 

No Longer Warrant Control Under the 

United States Munitions List (USML), 

(76 FR 76072, December 6, 2011) (RIN 

0694–AF41) (‘‘December 6 (gas turbine 

engines) rule’’); 

• ‘‘Specially Designed’’ Definition, 

(77 FR 36409, June 19, 2012) (RIN 0694– 

AF66) (‘‘June 19 (specially designed) 

rule’’); and 

• Proposed Revisions to the Export 

Administration Regulations: 

Implementation of Export Control 

Reform; Revisions to License Exceptions 

After Retrospective Regulatory Review, 

(77 FR 37524, June 21, 2012) (RIN 0694– 

AF65) (‘‘June 21 (transition) rule’’). 

C. Relationship to Other Rules 

Implementing ECR 

This final rule is published 

concurrently with the Department of 

State final rule, Revisions to the 

International Traffic in Arms 

Regulations: Initial Implementation of 

Export Control Reform. BIS anticipates 

additional final rules will be published 

concurrently by both agencies moving 

additional munitions items from the 

USML to the CCL, once the notification 

process is completed in accordance with 

section 38(f) of the AECA and 

subsequent USML categories and the 

corresponding Export Control 

Classification Numbers (ECCNs) are 

published in final form. 

II. Addition of the ‘‘600 Series’’ to the 

CCL 

In the July 15 (framework) rule, BIS 

proposed to add a new ‘‘xY6zz’’ control 

series to the CCL. This series, known as 

the ‘‘600 series,’’ would control most 

items formerly on the USML that move 

to the CCL and would consolidate the 

thirteen existing Wassenaar 

Arrangement Munitions List (WAML) 

entries (i.e., those entries currently 

under ‘‘xY018’’). In implementing the 

‘‘600 series’’ in this rule, as discussed 

below, BIS took into account comments 

related to the function and structure of 

the ‘‘600 series’’ submitted under all 

prior proposed rules issued as part of 

ECR that would move items from the 

USML to the CCL. These rules are: 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Military Vehicles and Related 

Items That the President Determines No 

Longer Warrant Control on the United 

States Munitions List, (76 FR 76085, 

December 6, 2011); 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Vessels of War and Related 

Articles the President Determines No 

Longer Warrant Control Under the 

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22662 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

United States Munitions List (USML), 

(76 FR 80282, December 23, 2011); 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Submersible Vessels, 

Oceanographic Equipment and Related 

Articles That the President Determines 

No longer Warrant Control Under the 

United States Munitions List (USML) (76 

FR 80291, December 23, 2011); 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Energetic Materials and 

Related Articles That the President 

Determines No Longer Warrant Control 

Under the United States Munitions List 

(USML) (77 FR 25932, May 2, 2012); 

• Revisions to the Export 

Administration Regulations: Auxiliary 

and Miscellaneous Items That No 

Longer Warrant Control Under the 

United States Munitions List and Items 

on the Wassenaar Arrangement 

Munitions List (77 FR 29564, May 18, 

2012); 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Personal Protective 

Equipment, Shelters, and Related Items 

the President Determines No Longer 

Warrant Control Under the United 

States Munitions List (USML) (77 FR 

33688, June 7, 2012); and 

• Revisions to the Export 

Administration Regulations (EAR): 

Control of Military Training Equipment 

and Related Items the President 

Determines No Longer Warrants Control 

Under the United States Munitions List 

(USML) (77 FR 35310, June 13, 2012). 

These rules, as well as the rules 

referenced in Section I.B., above, 

published in 2011 and 2012, provided 

the public with extensive notice 

regarding the proposed control structure 

and transition-related provisions and 

offered a wide array of examples of 

proposed ‘‘600 series’’ items. The public 

comments BIS received in response to 

these proposed rules have played an 

important role in helping the 

Administration refine the provisions 

that are included in this final rule and 

the corresponding Department of State 

final rule to achieve initial 

implementation of ECR. A summary of 

the comments and BIS’ responses are 

provided below. 

A. General Structure 

Under the July 15 (framework) rule, 

BIS proposed to add the new ‘‘600 

series’’ to each applicable CCL category 

so that it would fall after the 300 series 

(ECCNs that control items primarily for 

chemical and biological weapon 

proliferation reasons) and before the 900 

series (ECCNs that control items for 

various U.S. foreign policy reasons). The 

‘‘600 series’’ framework would allow for 

identification, classification, and control 

of items transferred from the USML that, 

based on their technical or other 

characteristics, are not classified under 

an existing ECCN that is subject to 

controls for any reason other than AntiTerrorism (AT) reasons. This structure 

would allow for a straightforward 

application of a licensing policy for 

items that move to the CCL from the 

USML. The fourth and fifth characters 

of each new ‘‘600 series’’ ECCN would 

generally track the WAML categories for 

the types of items at issue. 

BIS is adopting the general structure 

of the ‘‘600 series’’ proposed under the 

July 15 (framework) rule. Most 

commenters were supportive of this 

structure, but some commenters were 

concerned that it did not make the CCL 

more ‘‘positive’’ and that dual-use items 

may be controlled under a ‘‘600 series’’ 

ECCN. BIS shares the goal of creating a 

more positive control list, but 

maintained a goal that no items be 

unintentionally decontrolled during the 

process of moving items from the USML 

to the CCL. Since the USML contains, 

inter alia, catch-all controls on parts, 

components, accessories, and 

attachments specifically designed or 

modified for defense articles, most of 

these catch-all controls are being moved 

to the CCL. BIS will continue to work 

to make the CCL more positive through 

the multilateral regimes and through 

considering public comments 

responding to the advance notice of 

proposed rulemaking, Feasibility of 

Enumerating ‘‘Specially Designed’’ 

Components, (77 FR 36419, June 19, 

2012). Also, BIS does not believe that 

dual-use items or purely civil items— 

i.e., items that are now subject to the 

EAR and not subject to the jurisdiction 

of the ITAR—would be moved to a ‘‘600 

series’’ entry because items in a -018 

ECCN are on the WAML and thus, even 

prior to this rule, are more properly 

described as munitions items than dualuse or purely civil items. 

B. Reasons for Control 

In proposing the ‘‘600 series,’’ the July 

15 (framework) rule also proposed the 

reasons for control for ‘‘600 series’’ 

ECCNs. Generally, such ECCNs would 

be subject to National Security Column 

1 (‘‘NS1’’), Regional Stability Column 1 

(‘‘RS1’’), Anti-Terrorism Column 1 

(‘‘AT1’’), and United Nations Embargo 

(‘‘UN’’) reasons for control. In addition, 

end items moving from the USML that 

are controlled by the Missile 

Technology Control Regime, Australia 

Group, and Firearms Convention would 

be controlled for Missile Technology 

Column 1 (‘‘MT1’’), Chemical and 

Biological Weapons Proliferation 

Column 1 (‘‘CB1’’), and Firearms 

Convention (‘‘FC’’) reasons, 

respectively, under the EAR. Items that 

were on the CCL prior to the creation of 

the ‘‘600 series’’ and that move into the 

‘‘600 series’’ would retain the reasons 

for control to which those items were 

subject prior to the creation of the ‘‘600 

series.’’ 

BIS is adopting the reasons for control 

described above in this final rule. Some 

commenters were concerned that the 

‘‘600 series’’ ECCNs contained too many 

varying controls, unilateral NS controls, 

overly sensitive NS1 and RS1 controls, 

or could inaccurately contain MT 

controls. BIS does not agree with these 

comments. Almost all items moving 

from the USML to the ‘‘600 series’’ are 

also on the WAML, particularly 

considering the catch-all controls in the 

WAML. Thus, there is already 

multilateral agreement on such items 

and NS controls are warranted. To the 

extent an item in the ‘‘600 series’’ is not 

on the WAML, BIS has concluded that 

its inherent or unique military or 

intelligence applicability warrants RS1 

controls, unless the item is specifically 

listed in a .y paragraph within the ECCN 

(see discussion below in Section II.C for 

an explanation of .y paragraphs). BIS 

has also determined that certain license 

exceptions should be available under 

certain circumstances and under 

specific conditions in order to better 

harmonize the EAR’s exceptions with 

the exemptions in the ITAR or to 

otherwise implement the national 

security objectives of the reform effort as 

set forth above. With respect to MT 

controls, the Departments of Defense, 

State, and Commerce have reviewed the 

USML to determine which items are 

currently subject to MT controls. As 

mentioned, BIS will continue to review 

the CCL to make the entries more clear 

and positive, including reviewing the 

scope of controls on items subject to the 

EAR. 

The United Nations (UN) reason for 

control was added to the ‘‘600 series’’ 

ECCNs after publication of the rule 

Export and Reexport Controls to 

Rwanda and United Nations Sanctions 

Under the Export Administration 

Regulations (77 FR 42973, July 23, 2012) 

established this convention for 

identifying items controlled to UN armsembargoed destinations. 

C. Items Paragraph 

Within each ‘‘600 series’’ ECCN, the 

July 15 (framework) rule proposed that 

specific ‘‘end items,’’ ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ moving from the USML 

would, unless otherwise noted, be 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22663 

positively enumerated in paragraphs .a 

through .w. Former USML ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ that are not (i) 

enumerated in the revised, positive 

USML or (ii) enumerated in a new ‘‘600 

series’’ entry in paragraphs .a through 

.w would be controlled in the .x 

paragraph of each new corresponding 

‘‘600 series’’ ECCN as ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ ‘‘specially designed’’ for 

items controlled elsewhere in that ECCN 

or for defense articles controlled in the 

corresponding USML category. 

The .y paragraph of each ‘‘600 series’’ 

would control specific types of ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ that, even if ‘‘specially 

designed’’ for a defense article or ‘‘600 

series’’ end item, warrant no more than 

AT-only controls. Thus, one would not 

need to review the .x paragraph if a 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ is described in the .y 

paragraph. The .y paragraphs thus do 

not control the enumerated items if they 

were not ‘‘specially designed’’ for a 

‘‘600 series’’ item or a defense article 

subject to the ITAR. 

BIS received multiple comments 

regarding the structure of the .x and .y 

paragraphs. With respect to the .x 

paragraph, some commenters 

recommended that the descriptions of 

items should be more positive and avoid 

the use of ‘‘specially designed,’’ while 

other commenters believed that items in 

.x should only be subject to embargoes, 

end-use controls, and end-user controls. 

Again, BIS shares the goal of ultimately 

having a more positive list of items 

controlled in the ‘‘600 series’’ and the 

CCL generally. However, the proposed 

revisions must comply with multilateral 

regime obligations and must not 

inadvertently decontrol items that are 

being moved from the USML. Moreover, 

it would be physically impossible and 

impractical to enumerate every U.S. and 

foreign-origin ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ and ‘‘attachment’’ that is or 

ever was ‘‘specially designed’’ for every 

U.S. and foreign-origin military item. 

Therefore, BIS is maintaining the use of 

‘‘specially designed’’ when describing 

items in the .x paragraph. Further, while 

items in the .x paragraph are of less 

significance than the controls of the 

ITAR warrant, they nevertheless warrant 

control beyond the requirements of 

parts 744 and 746 due to their inherent 

military or intelligence characteristics. 

With respect to the .y paragraph, 

commenters expressed support for 

positively enumerating items in the .y 

paragraph and applying an AT control 

only. However, some commenters 

believed that .y items should be 

designated EAR99, that BIS should 

develop a list of items that would be 

controlled for AT reasons only across all 

‘‘600 series’’ ECCNs, or that .y items 

should be controlled under an existing 

ECCN subject to AT control rather than 

a ‘‘600 series’’ ECCN. 

BIS does not accept these 

recommendations. All items described 

in the .y series have been subject to the 

ITAR in that they, by definition, were 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

or ‘‘attachments’’ specifically designed 

or modified for a defense article. If such 

items were identified as not being ITAR 

controlled in a commodity jurisdiction 

(CJ) determination or were not 

otherwise specifically designed or 

modified for a defense article, then they 

were not ITAR-controlled and are not 

now becoming subject to a .y control. To 

avoid designating such items as EAR99, 

BIS developed the .y list structure and 

is implementing the .y list structure in 

this final rule to reflect the lesser 

military significance of such items. 

Also, as one commenter alluded to, the 

definition of ‘‘specially designed’’ 

already provides a list of ‘‘parts’’ in 

paragraph (b)(2) of the definition that 

are militarily less significant across all 

categories. The .y list is necessary for 

individual ‘‘600 series’’ entries because 

a ‘‘part’’ ‘‘specially designed’’ for one 

end item or end use may not be 

considered critical, but similar ‘‘parts’’ 

may be critical for a different end item 

or end use. For example, ‘‘hoses’’ for 

military vehicles may warrant a .y 

listing in the ‘‘600 series’’ controls for 

military vehicles but not all ‘‘hoses’’ 

specially designed for military aircraft 

are per se insignificant. Moreover, BIS 

believes that the inherent military 

nature of .y items necessitates inclusion 

in a ‘‘600 series’’ ECCN rather than an 

existing ECCN with an AT reason for 

control. Because different classification 

and marking schemes will already be 

necessary for such items since they are 

currently subject to the ITAR, there 

would be little benefit to exporters of 

using an existing ECCN vis-a`-vis a .y 

entry in a ‘‘600 series’’ ECCN because 

both are subject to the same reason for 

control and the same reporting 

requirements in the Automated Export 

System (AES). As described below, part 

758 is being amended to address issues 

pertaining to the reporting of ‘‘600 

series’’ items in AES. 

This rule does not adopt the proposal 

to create .y.99 paragraphs that was first 

proposed in the November 7 (aircraft) 

rule. One commenter raised concerns 

about moving items to the .y.99 

paragraph if the items were determined 

to be subject to the EAR under a prior 

CJ determination and are not on the 

CCL. BIS agrees that the burden of 

tracking down and analyzing whether 

items formally determined not to be 

subject to the ITAR were also EAR99 

items because they were not identified 

on the CCL outweighs the oncecontemplated organizational benefits of 

creating the .y.99 control. Such items 

have already gone through an 

interagency review process that 

concluded whether the items were 

subject to the ITAR. Thus, BIS has 

determined that any such items should 

retain EAR99 status if not otherwise 

identified on the CCL. Paragraph (b)(1) 

of the new definition of ‘‘specially 

designed’’ also reflects this 

understanding. An amendment to 

General Order No. 5 from what was 

proposed in the June 21 (transition) 

rule, as discussed further below in 

Section III.C, also addresses this issue. 

III. Transition 

A. Delayed Effective Date 

This rule adopts a delayed effective 

date of 180 days after publication in the 

Federal Register. The public comments 

addressing the effective date for this 

final rule varied. Some commenters 

requested a 120-day delay before the 

effective date while other commenters 

requested a longer delay, ranging from 

180 days to four years. They cited many 

tasks to be performed as a result of this 

transition, including classifying and 

marking items transferred to the CCL, 

obtaining new licenses, changing 

internal databases, modifying 

compliance practices, and training 

personnel. BIS and the Directorate of 

Defense Trade Controls (DDTC), 

Department of State have taken various 

steps to ease the transition from the 

USML to the CCL. This final rule 

includes specific provisions to ease the 

transition process, such as the new 

General Order No. 5 in Supplement No. 

1 to part 736 being added to the EAR in 

this final rule and the provisions to 

address the dual-licensing issue, that are 

discussed below in Sections III.B and 

III.C. 

These provisions, along with the other 

changes included in this final rule, are 

intended to ease the transition for 

exporters, reexporters and transferors 

from the USML to the CCL and alleviate 

some of the public concerns regarding 

the effective date of the rule. BIS agrees 

that a reasonable period of transition, 

including a delayed effective date for 

this final rule, should be provided. 

Therefore, this final rule has a delayed 

effective date of 180 days. This 

approximately six-month period will 

provide the regulated community a 

reasonable amount of time to implement 

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changes to conform their export control 

compliance systems to the new ‘‘600 

series’’ and the first ten ECCNs that are 

being added to the EAR in this final 

rule. A longer delay, such as four years, 

as recommended by one commenter, 

would not have been reasonable given 

the national security objectives of the 

reform effort set out above. A 180-day 

delayed effective date represents BIS’s 

best effort to provide sufficient time for 

exporters, reexporters and transferors to 

update their internal systems and for 

BIS to provide education and outreach 

services to those affected who may not 

have been following closely the changes 

BIS has proposed over the course of the 

last two years. 

B. Amendment to the EAR To Address 

Dual Licensing 

In response to the June 21 (transition) 

rule, many commenters expressed 

concerns that the movement of items 

from the USML to the CCL would result 

in the need to obtain a license from 

DDTC and a license from BIS for many 

transactions that currently only require 

one license from one agency. For 

example, exports of end items on the 

USML often contain related USML parts 

and components in the shipment, so 

such items are typically authorized 

under a single DDTC license, such as a 

DSP–5. Since many parts and 

components are moving from the USML 

to the CCL, this typical export scenario 

could require two separate 

authorizations from two agencies. 

Further, one commenter to the June 21 

(transition) rule stated that it is industry 

practice to include items currently 

subject to the EAR in a single license 

application to DDTC or under the 

Foreign Military Sales (FMS) program 

because such items will accompany 

USML items in a shipment authorized 

under a license or because such EAR 

items are included in an executed Letter 

of Offer and Acceptance (LOA) under 

the FMS program. 

To address these issues, BIS is 

amending part 734 to reflect the fact that 

the President has delegated to the 

Secretary of State the authority to 

license or otherwise authorize the 

export, reexport or in-country transfer of 

items otherwise subject to the EAR, as 

agreed upon by the Secretaries of State 

and Commerce. (Executive Order 13637 

of March 8, 2013, Administration of 

Reformed Export Controls, 78 FR 16129, 

March 13, 2013). The items will remain 

subject to the EAR, and BIS will 

continue to maintain jurisdiction for 

licensing and enforcement. However, 

applicants will be able to choose 

whether to use a DDTC or BIS 

authorization so long as the export, 

reexport, or in-country transfer meets 

the applicable requirements described 

herein. 

In accordance with new § 120.5(b) of 

the ITAR, § 734.3(e) authorizes the 

export, reexport or in-country transfer of 

items subject to the EAR when the items 

subject to the EAR will be used in or 

with items subject to the ITAR and are 

included on the same DDTC license, 

agreement, or other approval. Thus, a 

DDTC license, agreement, or other 

approval made in accordance with 

§ 120.5(b) of the ITAR will preclude the 

need for a separate license from BIS, 

and a BIS license will only be required 

when an export, reexport, or in-country 

transfer exceeds the scope of the DDTC 

license, agreement, or other approval or 

exceeds the scope of § 120.5(b) of the 

ITAR. DDTC added § 120.5(b) to the 

ITAR on April 16, 2013.) 

Under this provision, DDTC has 

discretion in determining whether the 

requirements of § 120.5 have been met 

and whether items subject to the EAR 

should be authorized under a license, 

agreement, or other approval by DDTC. 

To provide guidance on the use of 

§ 120.5(b) of the ITAR, items subject to 

the EAR may be exported, reexported, or 

transferred (in-country) using a valid 

DDTC license, agreement, or other 

approval. The following are illustrative 

scenarios for when such approvals may 

be used: 

• Parts and components subject to the 

EAR that will be used in or with end 

items subject to the ITAR and that 

would otherwise require a license from 

BIS may all be exported under a DDTC 

license, such as a DSP–5, or reexported 

under a DDTC General Correspondence 

(GC) approval. 

• Software subject to the EAR that 

will be used in or with software or an 

end item subject to the ITAR and that 

would otherwise require a license from 

BIS may all be exported under a DDTC 

license, such as a DSP–5, or reexported 

under a GC. 

• Technology subject to the EAR that 

is used with technical data subject to 

the ITAR that will be used under the 

terms of a Technical Assistance 

Agreement (TAA) or Manufacturing 

License Agreement (MLA) and that 

would otherwise require a license from 

BIS may all be exported under the TAA 

or MLA. 

• If a program authorized by a TAA 

or MLA requires that parts and 

components subject to the EAR and 

parts and components subject to the 

ITAR be shipped in furtherance of the 

TAA or MLA, then DSP–5 licenses may 

be used. However, if the program only 

requires that parts and components 

subject to the EAR be shipped in 

furtherance of the TAA or MLA, then 

authorization must be obtained from BIS 

and DSP–5 licenses may not be used. 

One commenter also believed that 

another scenario would require 

additional licensing—the export and 

subsequent installation of a ‘‘600 series’’ 

part or component into a foreign defense 

article. Under this situation, a license 

may be required from BIS to export the 

‘‘600 series’’ parts or components and 

then a TAA may be required from DDTC 

to perform the defense service in order 

to provide the installation and 

integration services with respect to a 

defense article. However, this scenario 

differs from those above because two 

authorizations would already be 

required under the ITAR. For instance, 

if the part or component to be exported 

is currently on the USML, then the 

applicant would need to apply for a 

TAA for the exchange of technical data 

pursuant to providing the installation 

and integration service regarding a 

defense article, while also applying for 

a separate DSP–5 license for the export 

of the part or component. If the part or 

component is currently subject to the 

EAR or would become subject to the 

EAR as a ‘‘600 series’’ item, then a TAA 

would still be required from DDTC and 

a license or other authorization would 

be required from BIS for the export of 

the part or component. Since the 

number of authorizations would remain 

the same, this scenario would not be 

eligible for the provision described 

above. 

Section 734.3(e) authorizes the export, 

reexport or in-country transfer of items 

subject to the EAR when those items are 

subject to licenses, agreements, or other 

approvals issued by DDTC to authorize 

items subject to the EAR that will be 

exported, reexported, or transferred (incountry) under the FMS program. Items 

subject to the EAR that are included in 

an executed Letter of Offer and 

Acceptance under the FMS program 

may be identified in a DSP–94 

submitted in accordance with § 126.6(c) 

of the ITAR. The DSP–94 and use of 

§ 126.6(c) will serve as authorization for 

items subject to the EAR, and no 

separate authorization from BIS will be 

required. However, any export, reexport, 

or in-country transfer of an item subject 

to the EAR that is outside the scope of 

the LOA or DSP–94 must adhere to the 

requirements of the FMS case. In 

addition, no separate authorization from 

BIS is required to supplement actions 

taken on FMS cases by the Department 

of State’s Office of Regional Security 

and Arms Transfers (RSAT). Questions 

regarding §§ 120.5(b) or 126.6(c) of the 

ITAR; the use of any DDTC license, 

agreement, or other approval; or FMS 

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cases should be directed to DDTC or 

RSAT, as appropriate. 

C. Transition Period and General Order 

No. 5 

In the June 21 (transition) rule, BIS 

proposed creating General Order No. 5 

in Supplement No. 1 to part 736 to 

describe the transition process for items 

moving from the USML to the CCL upon 

the publication of the pertinent final 

rules. The proposed general order 

described the grandfathering of DDTC 

licenses and agreements, the use of BIS 

authorizations, and the submission of 

disclosures to BIS and DDTC related to 

the transition of items from the USML 

to the CCL. In response to the proposed 

general order, BIS received public 

comments regarding: the timing for 

submitting a license application to BIS, 

clarification of when to submit a 

disclosure to BIS and when to submit a 

disclosure to DDTC, a recommendation 

to include some form of a ‘‘safe harbor’’ 

for violations when a DDTC approval is 

used for items subject to the EAR, and 

guidance on shipping documentation. 

1. Timeline for Applications, 

Amendments, and Grandfathering 

Because BIS and DDTC are adopting 

a six-month delay in the 

implementation of this final rule, BIS 

has made corresponding amendments to 

General Order No. 5 regarding the 

earliest date that BIS will accept license 

applications for items moving from the 

USML to the CCL under this final rule 

and under future final rules. For those 

wishing to export under the authority of 

the EAR as soon as possible for items 

moving from the USML to the CCL, 

applicants may submit license 

applications immediately after the 

publication of the final rule adding such 

items to the CCL. Thus, applicants may, 

in effect, pre-position license 

applications early to facilitate 

processing of the license application. 

Such a pre-positioned license 

application will be processed in 

accordance with § 750.4 of the EAR, but 

if BIS completes processing the 

application prior to the effective date of 

the applicable final rule, BIS will hold 

the application without action (HWA), 

until the effective date of that final rule. 

Applications for transitioned items 

received after the effective date of the 

applicable final rule will be processed 

as described in § 750.4 of the EAR. 

Existing holders of DDTC licenses, 

agreements, or other approvals, may 

maintain existing authorizations or 

obtain new authorizations for items 

moving from the USML to the CCL in 

accordance with DDTC’s transition plan. 

Proposed General Order No. 5 has been 

amended to more closely correspond to 

DDTC’s finalized transition plan. 

Questions regarding the continued use 

of DDTC licenses, agreements, or other 

approvals should be directed to DDTC. 

2. Submission of Voluntary SelfDisclosures 

BIS is amending the prior guidance in 

proposed General Order No. 5 with 

respect to submitting disclosures to BIS 

or DDTC. The amendment makes clear 

the existing recommended practice will 

continue to apply. For potential 

violations of the EAR, persons are 

recommended to submit a voluntary 

self-disclosure to BIS; for potential 

violations of the ITAR, persons are 

recommended to submit a voluntary 

disclosure to DDTC; and for potential 

violations of both the EAR and ITAR, 

persons are recommended to submit 

disclosures to both agencies. One 

commenter suggested inserting a ‘‘safe 

harbor’’ provision for those who use a 

DDTC authorization for items subject to 

the EAR. BIS believes that the addition 

of § 734.3(e) addresses that commenter’s 

concerns, because it removes the dual 

licensing requirement that gave rise to 

those concerns (see Section III.B., 

above). Also, if a person uses a DDTC 

authorization for an item subject to the 

EAR that does not fall within the 

circumstances described in § 734.3(e), 

BIS will exercise discretion in reviewing 

and responding to those who filed 

disclosures involving such scenarios. 

3. Miscellaneous Issues 

Because of the six-month 

implementation period for this final 

rule, BIS believes that the public will 

have adequate time to adjust USML and 

CCL notations for shipping documents. 

BIS, therefore, is not adding provisions 

related to export clearance in General 

Order No. 5. BIS is, however, amending 

the proposed General Order No. 5 to add 

a paragraph (c) to address the removal 

of the proposed .y.99 paragraph for ‘‘600 

series’’ ECCNs by clarifying that if the 

U.S. Department of State has previously 

determined that an item is not subject 

to the ITAR and the item is not listed 

on the CCL, then the item will remain 

designated as EAR99. 

IV. Retrospective Regulatory Review 

On January 18, 2011, President Barack 

Obama issued Executive Order 13563, 

affirming general principles of 

regulation and directing government 

agencies to conduct retrospective 

reviews of existing regulations. 

Although ECR did not originate with 

Executive Order 13563, it is consistent 

in spirit and substance. On August 5, 

2011, BIS issued a notice soliciting 

public comment on streamlining its 

regulations pursuant to that executive 

order (76 FR 47527). In response to 

public comments received on the 

August 5, 2011 notice, and consistent 

with BIS’s internal analysis, the June 21 

(transition) rule proposed revisions to 

license exceptions for government uses 

(GOV, § 740.11) and temporary exports 

(TMP, § 740.9) that streamlined and 

updated unduly complex or outmoded 

provisions. At the same time, BIS 

broadened certain provisions within 

these license exceptions to implement 

ECR. One commenter to the June 21 

(transition) rule stated that it 

appreciated BIS’s efforts to streamline 

this regulatory text. 

BIS intends to address other proposed 

changes to the EAR in accordance with 

the executive order in separate Federal 

Register notices. BIS received a number 

of comments, particularly on license 

exceptions in response to the June 21 

(transition) rule, that require extensive 

consideration, possibly including 

additional proposals seeking public 

comment. BIS intends to address these 

comments in future rules as part of BIS’s 

continuing retrospective review of the 

EAR. 

Commerce’s full retrospective 

regulatory review plan under Executive 

Order 13563 can be accessed at: http:// 

open.commerce.gov/news/2011/08/23/ 

commerce-plan-retrospective-analysisexisting-rules. 

V. Part 730—General Information 

This rule revises the heading of 

§ 730.3 from ‘‘Dual use exports’’ to 

‘‘‘‘Dual use’’ and other types of items 

subject to the EAR’’ to reflect the scope 

of items subject to export controls under 

the EAR. Similarly, the revised text 

notes that while the term ‘‘dual use’’ is 

often used to describe the types of items 

subject to the EAR, more precisely, any 

item that is not exclusively controlled 

for export or reexport by another agency 

of the U.S. Government or excluded 

from the EAR pursuant to § 734.3(b), is 

subject to the EAR. 

One commenter recommended 

deletion of part 730, because it is not 

regulatory, but guidance. BIS has not 

adopted this recommendation, because 

it was outside the scope of this rule. The 

part exists for the benefit of those new 

to exporting. 

VI. Part 732—Steps for Using the EAR 

BIS is amending §§ 732.2 (Steps 

regarding scope of the EAR) and 732.3 

(Steps regarding the ten general 

prohibitions) to remove text that is 

redundant to that found in 

§ 736.2(b)(3)—General Prohibition 

Three. BIS received one comment in 

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22666 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

response to the July 15 (framework) 

rule’s part 732 proposal. The commenter 

recommended deletion of parts 730 and 

732, because the commenter believes 

those provisions are guidance and not 

regulatory in nature. For reasons 

described in discussion to part 730 

above, BIS has decided to keep parts 

730 and 732 for the benefit of those new 

to exporting. However, BIS agreed with 

the recommendation to add a disclaimer 

to part 732 stating that part 732 should 

only be used as a general overview of 

the EAR. This disclaimer is in new 

§ 732.1(a)(3). BIS also agreed that 

repeating regulatory text concerning 

General Prohibition Three in §§ 732.2 

and 732.3 is not useful; therefore, the 

repeated text is deleted and replaced by 

a brief explanation of the direct product 

rule (General Prohibition Three) and a 

reference to § 736.2(b)(3) is added to 

§ 732.2(f). Although the June 21 

(transition) rule proposed revisions to 

the direct product rule, it did not 

propose corresponding revisions to the 

steps. This final rule makes that 

conforming change. 

The order of review in § 732.3(b) (Step 

7: Classification) is revised to add a 

reference to Supplement No. 4 to part 

774—Commerce Control List Order of 

Review. The July 15 (framework) rule 

proposed to add a cross reference in 

Step 22 (Terms and Conditions of the 

License Exceptions), § 732.4(b)(3)(iv). 

The reference alerts exporters that, if 

they are exporting under License 

Exceptions LVS, TMP, RPL, STA, or 

GOV and their item is classified in the 

‘‘600 series,’’ they should review § 743.4 

of the EAR to determine the 

applicability of certain reporting 

requirements for conventional arms 

exports. This rule implements that 

proposal. 

The July 15 (framework) rule also 

proposed to revise Step 26 (license 

applications) to add a paragraph 

describing the process of requesting 

License Exception STA eligibility for 

export, reexport or in-country transfer of 

an aircraft controlled under ECCN 

9A610.a. While the July 15 (framework) 

rule proposed eligibility requests for 

‘‘end items’’ generally, ships, vehicles, 

and aircraft were the ‘‘end items’’ items 

identified in subsequent technical 

reviews as requiring a determination of 

eligibility for License Exception STA, 

and of those, only aircraft are included 

in this final rule. A reference is also 

added to Step 26 to Supplement No. 2 

to part 748, paragraph (w) (License 

Exception STA eligibility requests), 

which contains instructions for how to 

request in an application that 

subsequent exports of such end items be 

eligible for License Exception STA. The 

revisions to Step 26 also indicate that 

exporters, reexporters and transferors 

may review the list of such end items 

that have already been approved for 

License Exception STA pursuant to 

§ 740.20(g) in the License Exceptions 

paragraph of ECCN 9A610. Lastly, to 

alert exporters, reexporters, and 

transferors who wish to use License 

Exception STA in such cases in which 

License Exception STA has been 

approved, a new Note was proposed to 

§ 734.4(b)(7)(ii) to remind them to 

review paragraphs (a) and (b) to 

determine the steps needed in using 

license exceptions. BIS did not receive 

any comments regarding these specific 

proposals. 

VII. Supplement No. 3 to Part 732—Red 

Flags 

This rule expands the EAR’s ‘‘Know 

Your Customer’’ Guidance and Red 

Flags to provide compliance guidance 

for License Exception STA and the ‘‘600 

series.’’ 

The July 15 (framework) rule 

proposed creating two new red flags, 

designated as numbers 13 and 14 in 

Supplement No. 3 to part 732, that 

would be specific to ‘‘600 series’’ items 

in addition to the existing 12 red flags 

in that supplement that apply to EAR 

transactions generally. 

One such proposed red flag (number 

13) would address a proposed 

transaction involving ‘‘parts’’ of ‘‘600 

series’’ items where the country of 

destination has no apparent need for the 

‘‘parts’’ or for the quantity ordered. One 

commenter stated this proposed red flag 

overlaps with two existing red flags that 

address item suitability and quantity for 

transactions subject to the EAR. This 

commenter proposed generalizing the 

proposed new red flag to make it 

applicable to all transactions subject to 

the EAR, not just ‘‘600 series’’ items. 

Another commenter recommended that 

the phrase ‘‘You receive an order’’ in 

this red flag be changed to read ‘‘An 

order received’’ and that the term 

‘‘components’’ be added to the red flag 

to make the red flag consistent with 

other red flags. Finally, one commenter 

recommended that this red flag not 

apply to .y items because such 

application would place an 

unreasonable requirement on the 

exporter. 

The second proposed red flag would 

address a proposed transaction in which 

the customer indicates that the ‘‘600 

series’’ items are destined for an arms 

embargoed country. One commenter 

suggested that this red flag be expanded 

to include customer indications of 

shipment to destinations or end users 

that would be prohibited or restricted 

for transactions involving all items 

subject to the EAR with a specific 

reference to ‘‘600 series’’ items and arms 

embargoed destinations. 

One commenter recommended that 

both proposed red flags not be adopted 

because they would not be applicable to 

any of the items proposed for the ‘‘600 

series’’ in the July 15 (framework) rule. 

This final rule makes one change to 

the new proposed red flags in response 

to these comments. It adds the term 

‘‘components’’ to red flag number 13 

because BIS believes the additional term 

more completely describes the 

transactions that this red flag is 

intended to address, although the listing 

of ‘‘parts’’ and ‘‘components’’ is not 

intended to be an exhaustive listing of 

items that may fall within the scope of 

this red flag because other ‘‘600 series’’ 

items, such as ‘‘accessories’’ and 

‘‘attachments’’ could also be used in this 

scenario. This final rule also makes a 

non-substantive clarification, by 

changing references from ‘‘item’’ to 

‘‘end item’’ to create greater consistency 

with how the term ‘‘end item’’ is being 

used in the context of this new red flag 

13. Lastly, to conform to the changes 

being made in this final rule, BIS is 

replacing the reference to arms 

embargoed countries in new red flag 14, 

with a reference to destinations listed in 

Country Group D:5 (see Supplement No. 

1 to part 740 of the EAR), which as 

described below, is a new country group 

being added to the EAR in this final 

rule. 

BIS did not adopt any of the other 

recommendations concerning the red 

flags for the following reasons. 

Generalizing red flags 13 and 14 to 

apply to the entire EAR would dilute 

their effect in highlighting the military 

nature of the ‘‘600 series’’ items and the 

precautions appropriate for such items, 

including the various provisions being 

added to the EAR in this final rule to 

implement an appropriate control 

structure under the EAR for these 

munitions items. Adopting the phrase 

‘‘An order received,’’ would be only a 

minor stylistic change from the 

proposed text that does not provide 

additional clarity. Excluding .y items 

from red flag 13 would be inappropriate 

because, even though the .y items 

require a license to fewer destinations 

than ‘‘600 series’’ items generally, they 

are ‘‘specially designed’’ ‘‘parts’’ and 

‘‘components’’ for military items and, as 

such, deserve inclusion. 

Several commenters in response to 

the July 15 (framework) rule also noted 

that exporters who will be new to the 

EAR because their items were 

previously only subject to the ITAR 

would benefit by having outreach 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22667 

materials developed specifically for 

them to assist them in understanding 

the EAR and the new ‘‘600 series.’’ Red 

flags in this supplement, including the 

new red flags 13 and 14 being added in 

this final rule, are and will be an 

important part of BIS’s outreach 

program. The BIS outreach program 

focuses on assisting persons involved in 

transactions that are subject to the EAR 

in understanding their responsibilities 

and what steps they can take to avoid 

being involved in transactions that may 

violate the EAR. BIS believes the two 

new red flags described above will assist 

those persons involved in transactions 

that are subject to the EAR involving 

‘‘600 series’’ items, in particular those 

exporters, reexporters and transferors 

who will be new to the EAR. 

VIII. Part 734—Scope of the EAR 

A. Dual Licensing 

As described above under section 

III.B., BIS is amending part 734 to note 

the authority of DDTC to authorize 

certain exports of items subject to the 

EAR to address public comments 

regarding dual licensing concerns. 

B. De Minimis 

Section 734.4 of the EAR sets forth the 

de minimis provisions, which provide 

that foreign-made items incorporating 

less than de minimis levels of U.S. 

content are not subject to the EAR. The 

July 15 (framework) rule proposed to 

add special restrictions for de minimis 

applicability for ‘‘600 series’’ items. 

That rule proposed amending § 734.4 

(De minimis U.S. content) by adding 

paragraph (b)(3) and making a 

conforming change to paragraph (c). The 

rule proposed restricting the scope of de 

minimis for ‘‘600 series’’ ‘‘parts,’’ 

‘‘components,’’ and other items subject 

to the EAR (i.e., those classified under 

xB6zz, xC6zz, xD6zz and xE6zz entries). 

The rule also proposed that when 

foreign-made items that incorporate 

such controlled U.S.-origin ‘‘600 series’’ 

items are to be exported from abroad or 

reexported to any country they are 

subject to the 10% de minimis rule for 

U.S.-origin content rather than the 25% 

de minimis rule. 

Fourteen commenters found the July 

15 (framework) rule proposal regarding 

a revised de minimis rule for ‘‘600 

series’’ items too complex and 

unworkable. Commenters stated that 

having a 10% de minimis rule for ‘‘600 

series’’ items and a 25% de minimis rule 

for all other items subject to the EAR 

would be extremely burdensome, if not 

impossible, for the commenters to 

calculate. 

The June 21 (transition) rule proposal 

addressed the calculation concerns of 

the commenters to the July 15 

(framework) rule by proposing to 

maintain the EAR’s 25 percent de 

minimis rule for reexports to most 

countries; and would carry forward the 

ITAR’s zero percent de minimis rule 

with respect to reexports of foreignmade items containing ‘‘600 series’’ 

content to countries subject to U.S. arms 

embargoes (Country Group D:5 of 

Supplement No. 1 to part 740 of the 

EAR). 

BIS received eight comments to the 

June 21 (transition) rule. Four 

commenters agreed with this approach. 

Four commenters disagreed with this 

approach, generally suggesting that the 

arms embargoed countries be subject to 

the same 10% de minimis threshold that 

applies to countries in Country Group 

E:1. These commenters provided two 

reasons. First, they stated that foreign 

manufacturers determine de minimis at 

development stage and use the lowest 

possible threshold. The possibility of a 

0% threshold may lead to designing out 

EAR content. Second, these commenters 

stated that three de minimis thresholds 

would make determining whether an 

item produced outside the United States 

is subject to the EAR unduly complex. 

BIS does not accept the 

recommendations to replace the 0% 

with a 10% U.S. content for foreignmade items containing ‘‘600 series’’ 

items destined to U.S. arms embargoed 

destinations (Country Group D:5 of 

Supplement No. 1 to part 740). BIS also 

does not agree with the comments that 

the approach would be unduly complex. 

All legal trade in defense articles is now 

with countries that are not subject to 

U.S. arms or other embargoes, and all 

such defense articles are subject to a 0% 

de minimis rule for all such 

destinations. Thus, for example, a 

foreign party’s transfer of a foreign-made 

end item containing even one U.S.- 

origin ITAR-controlled component of 

any value from one NATO member to 

another NATO member requires State 

Department authorization. This 

naturally creates dis-incentives to 

purchase U.S.-origin content even for 

end items to be sold to allies of the 

United States. This rule changes this 

current 0% de minimis rule of the ITAR 

for all such items to the standard 25% 

de minimis rule of the EAR for all such 

items. Contrary to the comments, this 

change is a dramatic reduction in 

complexity and will significantly reduce 

the current incentives for buyers in such 

countries to avoid purchasing what 

were ITAR-controlled parts and 

components and what will, with this 

rule and successive implementations of 

additional categories, become ‘‘600 

series’’ items subject to the EAR. It will 

at the same time maintain the status quo 

with respect to the 0% de minimis rule 

for trade in items with countries subject 

to U.S. arms embargoes. This is a simple 

rule—trade in foreign-made items with 

non-arms embargoed countries 

containing U.S.-origin military items is 

subject to the same rule as all other 

items subject to the EAR and trade in 

such items with countries subject to 

arms embargoes is prohibited, as is the 

case today. This furthers the twin U.S. 

policy objectives of removing 

unnecessary barriers in trade with most 

of the world and discouraging or indeed 

prohibiting trade in military items 

containing controlled U.S.-origin 

content with arms embargoed 

destinations. 

One commenter asked that BIS clarify 

the de minimis provisions of the EAR by 

rewriting Supplement No. 2 to part 734 

and by eliminating the one-time 

reporting requirement that applies to 

technology. BIS is not addressing this 

comment because it is outside the scope 

of any of the proposed rules being 

addressed by this final rule. Two 

commenters pointed out that § 123.9 of 

the ITAR contains an exemption for 

U.S.-origin components incorporated 

into a foreign defense article to a 

government of a NATO country, or the 

governments of Australia, Japan, New 

Zealand, South Korea and Israel without 

prior written approval from DDTC. 

License Exception GOV is equivalent to 

this ITAR exemption, and other license 

exceptions in part 740 may also be 

available, e.g., License Exception STA, 

for such transactions. One comment 

suggested BIS clarify the method of 

calculating the de minimis value by 

rewriting Supplement No. 2 to part 734 

of the EAR; this recommendation falls 

outside the scope of this final rule. 

In sum, this rule furthers U.S. 

national security and foreign policy 

interests by prohibiting the reexport of 

foreign-made items containing ‘‘600 

series’’ content to countries subject to 

U.S. arms embargoes (Country Group 

D:5 in Supplement No. 1 to part 740), 

while removing the incentive the ITAR 

creates for foreign buyers to avoid such 

U.S.-origin content with respect to trade 

by and between other countries. 

IX. Part 736—General Prohibitions 

A. Foreign-Produced Direct Product 

Prior to the effective date of this rule, 

certain foreign-produced direct products 

of U.S. technology were subject to the 

EAR: national security controlled items 

that were direct products of U.S. 

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national security-controlled technology, 

or of a plant that is the direct product 

of national security-controlled 

technology, when those products were 

destined to countries of concern for 

national security reasons (Country 

Group D:1) or terrorist-supporting 

countries (Country Group E:1). The June 

21 (transition) rule proposed to expand 

these provisions by adding an 

additional country and product scope. 

Foreign-produced direct products of 

U.S.-origin ‘‘600 series’’ technology, or 

of a plant or major component of a plant 

that is a direct product of U.S.-origin 

‘‘600 series’’ technology, that are ‘‘600 

series’’ items are now subject to the EAR 

when reexported or exported from 

abroad to countries listed in Country 

Groups D:1 (national security countries 

of concern), D:3 (chemical and 

biological countries of concern), D:4 

(missile technology countries of 

concern), D:5 (U.S. arms embargo 

countries) or E:1 (countries that support 

terrorism) in Supplement No. 1 to part 

740. Foreign-made items subject to the 

EAR because of this rule are subject to 

the same license requirements to the 

new country of destination as if they 

were of U.S. origin. 

BIS received three comments 

opposing the expanded country scope 

‘‘to include countries of concern due to 

nuclear proliferation or missile 

technology reasons’’ for ‘‘600 series’’ 

items on the grounds that ‘‘600 series’’ 

items are controlled for national 

security and regional stability reasons. 

BIS is not making the suggested changes 

and is adopting the expansion of the 

country scope to countries of concern 

for missile or chemical and biological 

weapon proliferation reasons, because 

some ‘‘600 series’’ items are or likely 

will be only controlled for missile 

technology or chemical and biological 

reasons. BIS does not anticipate that any 

‘‘600 series’’ items will be controlled for 

nuclear nonproliferation reasons, so BIS 

did not propose expansion of the 

foreign-produced direct product rule for 

‘‘600 series’’ items to countries of 

concern for nuclear proliferation and 

does not adopt such an approach in this 

final rule. 

B. General Order 5 

As described above in section III.C., 

BIS is amending part 736 to add General 

Order No. 5 to Supplement No. 1. 

X. Part 738—CCL Overview and the 

Country Chart 

This rule implements changes 

proposed in the July 15 (framework) 

rule to paragraph (b) of § 738.2 

(Commerce Control List (CCL) structure) 

by adding the new terms ‘‘end items,’’ 

‘‘attachments,’’ ‘‘parts’’ and ‘‘systems’’ 

to the description for Product Group A 

in order to describe the scope of items 

within CCL Product Group A with the 

more precise terms that are added to 

part 772 by this rule. 

BIS also adopts revisions to paragraph 

(c) of § 738.2 (Order of review) to 

provide a cross reference to the new 

Supplement No. 4 to part 774— 

Commerce Control List Order of Review 

that is also being added in this final 

rule. This new Supplement No. 4 sets 

forth the steps that should be followed 

in classifying items that are ‘‘subject to 

the EAR’’ and provides new guidance 

for how to classify items in light of the 

addition of the ‘‘600 series’’ of ECCNs to 

the CCL and the new definition of 

‘‘specially designed’’ also being added 

with this final rule. 

BIS had proposed in the July 15 

(framework) rule to add to paragraph 

(d)(1) of § 738.2 (Commerce Control List 

(CCL) structure) a reference to items 

warranting national security or foreign 

policy controls at the determination of 

the Department of Commerce under 

ECCN 0Y521. BIS received one 

comment suggesting that the descriptor 

for ECCNs that have ‘‘5’’ as their third 

digit should be, ‘‘Items subject to license 

requirements described in 

§ 742.6(a)(7).’’ BIS does not accept this 

suggestion to allow broader 

applicability than the items described in 

§ 742.6(a)(7). Another commenter 

recommended adding ‘‘Unilateral 

National Security or Foreign Policy 

Reasons’’ as a revised reason for control 

for ECCNs that have ‘‘5’’ as their third 

digit. This recommendation is also not 

accepted. BIS notes that in the final rule 

implementing the 0Y521 series, (4/13/ 

12, 77 FR 22191) the EAR indicates that 

the determination to control ECCNs that 

have ‘‘5’’ as their third digit was made 

by the Department of Commerce, and 

the term ‘‘Items warranting national 

security or foreign policy controls at the 

determination of the Department of 

Commerce’’ provides a more precise 

descriptor for these ECCNs. 

In § 738.2(d)(1), the July 15 

(framework) rule proposed to add a 

reference to the ‘‘600 series’’ to indicate 

that items in which the third character 

is a ‘‘6’’ are ‘‘600 series’’ items and 

controlled because they are Wassenaar 

Arrangement Munitions List (WAML) 

and formerly USML items subject to the 

jurisdiction of the EAR. As described in 

Section XXIII (part 772—Definitions 

(including Specially Designed)) in this 

rule, this rule also adds a definition of 

‘‘600 series’’ to provide additional 

information to the public regarding this 

control series. To explain the meaning 

of the last two numbers in ‘‘600 series’’ 

ECCNs, this rule adds a new paragraph 

(d)(1)(iv) that indicates that the last two 

characters of each ‘‘600 series’’ ECCN, 

with few exceptions, track the WAML 

categories for the types of items at issue. 

In order to stay consistent with the 

general structure of the groups within 

the CCL Categories, the Wassenaar 

Arrangement ML21 (‘‘software’’) and 

ML22 (‘‘technology’’), however, are 

rolled into the existing D (‘‘software’’) 

and E (‘‘technology’’) CCL product 

groups. The WAML numbering 

structure for the last two characters is 

generally used rather than the USML 

numbering structure because the 

majority of items to be transferred are 

subject to the WAML, although the ‘‘600 

series’’ is not limited to items on the 

WAML. Thus, the numbering scheme is 

generally consistent with such controls. 

BIS, however, deviated from this 

scheme with respect to the new controls 

on military aircraft engines and related 

items that fall under new ECCNs 9A619, 

9B619, 9C619, 9D619, and 9E619. 

WAML Category 19 controls directed 

energy weapons, but BIS has used the 

‘‘19’’ ECCN suffix in order to track the 

new USML category XIX that identifies 

the military aircraft engines and related 

items that were formerly controlled 

under USML Category VIII(b). 

This structure makes it easier to see 

that the United States continues to 

control all WAML items. In addition, 

multinational companies that must deal 

with both the USML system and the 

numbering system of most other allied 

countries (which generally track the 

WAML) should find compliance and 

tracking of controlled items somewhat 

easier. 

BIS received one comment suggesting 

that the ‘‘600 series’’ descriptor should 

be ‘‘Commerce Munitions List.’’ BIS did 

not accept the suggestion because it is 

not creating a new list of controlled 

items but rather incorporating items 

formerly subject to the ITAR into the 

existing Commerce Control List. 

This rule revises § 738.2(d)(2)(ii) to 

state that in some ‘‘600 series’’ ECCNs, 

the STA license exception paragraph or 

a note to the License Exceptions section 

contains additional information about 

License Exception STA applicability to 

that ECCN. This sentence is needed to 

distinguish the role of STA paragraphs 

in the License Exception sections of 

‘‘600 series’’ ECCNs from the role of 

those paragraphs in other ECCNs where 

the STA paragraph only denotes 

ineligibility of STA for destinations 

listed in § 740.20(c)(2). Upon the 

effective date of this final rule, those 

destinations will be listed in 

Supplement No. 1 to part 740, Country 

Group A:6. As described below in more 

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detail and briefly mentioned above, 

Country Group A:6 is one of the new 

country groups added to the EAR in this 

final rule. BIS proposed this revision to 

the text of § 738.2(d)(2)(ii) in the 

November 7 (aircraft) rule and received 

no comments. This final rule adopts the 

proposed text without change. As a 

conforming change, BIS is also replacing 

the phrase ‘‘eight destinations listed in 

§ 740.20(c)(2) of the EAR’’ where it 

appears in ECCN entries in part 774 

with the phrase ‘‘destinations listed in 

Country Group A:6 (see Supplement No. 

1 to part 740 of the EAR).’’ 

XI. Part 740—License Exceptions 

License Exceptions are published 

authorizations set forth in part 740 of 

the EAR that allow exports, reexports, 

and in-country transfers that would 

otherwise require a license to proceed 

without one if certain conditions are 

met. License Exceptions operate under 

the EAR the same way exemptions 

operate under the ITAR. 

A general principle underlying the 

incorporation of the ‘‘600 series’’ into 

the EAR is that, because items subject to 

the EAR are less militarily significant 

than those subject to the ITAR, EAR 

exceptions should not be more 

restrictive than comparable ITAR 

exemptions. BIS recognizes that several 

commenters to the June 21 (transition) 

rule agreed with this principle. The June 

21 (transition) rule proposed to 

harmonize the provisions of several 

EAR license exceptions with several 

ITAR exemptions, as set out in detail 

below, but only insofar as they are 

permitted by law and otherwise relevant 

to ‘‘600 series’’ items and other items 

subject to the EAR. In particular, BIS 

has no authority to change the scope of 

license exceptions available for items 

controlled for MT reasons because of 

statutory restrictions. See section (6)(l) 

of the Export Administration Act of 

1979, as amended, 50 U.S.C. app. 

§ 2405(l). 

When a license exception authorizes 

reexports under certain terms and 

conditions, there is no national security 

or foreign policy objective met by 

restricting in-country transfers that also 

meet those terms and conditions. In the 

June 21 (transition) rule, BIS proposed 

revising License Exceptions TMP and 

GOV (§§ 740.9 and 740.11, respectively) 

to explicitly provide authorization for 

in-country transfers. 

One commenter responding to the 

July 15 (framework) rule stated that ‘‘no 

limitation should be placed on incountry transfers of licensable items.’’ 

The commenter continued, ‘‘[t]he 

prospect that an item exported to an 

entity in a foreign country may be 

transferred to another entity in the same 

licensed country is inherent in the 

assessment of an export transaction. 

Accordingly, part 740 of the EAR should 

be revised to exclude all mentions of 

‘‘transfers (in-country).’’ BIS does not 

agree with this comment. The EAR’s 

end-use and end-user controls evidence 

a longstanding policy that an 

assessment of an export transaction 

involves more than the country of 

destination. Further, conditions on most 

licenses restrict subsequent transfer of 

the licensed items. Rather than include 

in-country transfers in some license 

exceptions and not in others when the 

policy rationale is the same, this rule 

revises § 740.1 to state that, when a 

license exception authorizes reexports, 

in-country transfers meeting the terms 

and conditions of the reexport are also 

authorized. While this specific revision 

was not proposed in the June 21 

(transition) rule, it is a logical outgrowth 

of BIS’s original proposal that stems 

from reviewing the related public 

comment and further thinking about 

how in-country transfers are addressed 

in part 740. 

A. Restrictions 

Section 740.2 describes restrictions on 

all license exceptions, and this rule 

adds certain restrictions specific to ‘‘600 

series’’ items in new paragraphs (a)(12) 

through (a)(16). 

In the July 15 (framework) rule, BIS 

proposed adding to § 740.2 new 

paragraphs (a)(12) (restricting the use of 

license exceptions to countries subject 

to a United States arms embargo) and 

(a)(13) (restricting the use of license 

exceptions for ‘‘600 series’’ items 

destined to countries other than those 

listed in proposed (a)(12)). In the June 

21 (transition) rule, BIS proposed that in 

addition to items destined to armsembargoed countries, items shipped 

from or manufactured in those 

destinations also be restricted from 

license exceptions. With this final rule, 

BIS adopts the (a)(12) proposal with an 

additional change. Rather than list the 

countries in (a)(12), they are being 

identified in a new Country Group D:5 

(Supplement No. 1 to part 740 of the 

EAR), as explained below in the 

Country Groups discussion (Section 

XI.H). The restriction on using license 

exceptions for ‘‘600 series’’ items 

destined to, shipped from, or 

manufactured in a destination subject to 

a United States arms embargo as 

described in § 126.1 of the ITAR 

remains set forth in paragraph (a)(12). 

One commenter recommended deleting 

Yemen from the (a)(12) list of countries 

to reflect an amendment to the ITAR; 

BIS agrees with this comment, and this 

rule does so in Country Group D:5. 

Further comments received on 

paragraph (a)(12) are described below, 

as part of the discussion of Country 

Groups in Section XI.H. 

Paragraph (a)(13) is adopted as set 

forth in the July 15 (framework) rule. 

The license exceptions available for 

‘‘600 series’’ items are listed in 

paragraph (a)(13). Each exception is 

available according to the terms and 

conditions set forth in its section and 

subject to the restrictions in § 740.2. 

Finally, in the June 21 (transition) 

rule, BIS proposed adding to § 740.2 two 

new paragraphs (a)(15) and (a)(16) 

restricting the availability of license 

exceptions for certain ‘‘600 series’’ 

exports for which prior notification to 

Congress will be made. This rule 

changes BIS’s original proposal, as 

explained below in the discussion of 

‘‘600 Series Major Defense Equipment’’ 

in Section XIII.B. 

B. License Exception TMP 

This rule revises § 740.9, License 

Exception Temporary imports, exports 

and reexports (TMP) paragraphs (a) 

(Temporary exports and reexports) and 

(b) (Exports of items temporarily in the 

United States) to streamline the existing 

exception consistent with the 

retrospective review and regulatory 

improvement directed in E.O. 13563, 

and to broaden the exception to 

correspond to certain ITAR exemptions. 

BIS proposed these revisions in the 

transition rule. 

BIS received three comments stating 

that, to correspond to the ITAR, TMP 

should provide for the return or 

disposal of items within four years 

rather than the current one year, and a 

further five comments stating that when 

authorization to retain the item abroad 

beyond one year is requested, that 

authorization be valid for four years 

rather than a one-time extension of six 

months. 

BIS does not agree that the term of 

TMP should be four years in order to 

correspond to the ITAR. Under the 

ITAR, most exemptions for temporary 

export require some other form of 

authorization to be in place for the 

exemption to be available. These 

requirements mean that simply 

extending TMP to a four-year term 

generally would be significantly more 

expansive than the ITAR exemptions. 

However, to better approximate ITAR 

controls, this rule revises TMP to 

provide that, when authorization to 

retain the item abroad beyond one year 

is requested, the term of the 

authorization may be for a total of four 

years rather than just an additional six 

months. 

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Four commenters questioned the term 

‘‘order to acquire,’’ seeking clarification 

on whether a purchase order would be 

considered an example of an order to 

acquire an item. BIS confirms that a 

purchase order would be one such 

example, and adds that example in this 

final rule. Four commenters asked for 

clarification that the term ‘‘U.S. persons 

and their employees’’ referred to 

employees of foreign branches. BIS is 

maintaining the existing definition in 

License Exception TMP of ‘‘U.S. 

persons,’’ which does not include 

foreign branches. Thus, no regulatory 

change is required. 

Seven commenters stated that 

§ 740.9(a)(3)(i)(B), as proposed in the 

June 21 (transition) rule, introduces 

‘‘additional recordkeeping 

requirements’’ for a temporary export of 

technology as a tool of trade by a nonU.S. person. In fact, prior to publication 

of that proposed rule, that requirement 

existed in the EAR in 

§ 740.9(a)(3)(iv)(A)(2). It was originally 

published on December 12, 2007 (72 FR 

70509) in a rule that established the 

ability to temporarily export technology 

as a tool of trade under License 

Exception TMP, which had previously 

been limited to commodities and 

software. This 2007 expansion of TMP 

was based in part on § 125.4(b)(9) of the 

ITAR, which allows certain exports of 

technical data by U.S. persons. The 

2007 rule also required that the 

employers of non-U.S. persons 

document the need to travel, as a 

safeguard to the expansion of the tools 

of trade provision of TMP beyond U.S. 

persons. This restriction does not 

impose additional requirements on any 

permanent release of technology, 

because License Exception TMP does 

not authorize any new (i.e., previously 

unauthorized) release of technology. It 

authorizes temporary exports of that 

technology as a tool of trade. BIS 

believes the commenters misconstrued 

this provision, and this final rule adopts 

it as proposed in the June 21 (transition) 

rule. 

In the June 21 (transition) rule, BIS 

proposed that temporary exports under 

License Exception TMP to a U.S. 

person’s foreign subsidiary, affiliate, or 

facility abroad would no longer be 

limited to exports to Country Group B 

countries in order to make TMP 

consistent with § 123.16(b)(9) of the 

ITAR. Three commenters recommended 

adding ‘‘materials’’ to the types of items 

eligible for this provision. BIS did not 

make this change. Materials are unlikely 

to be returned in the form received and 

are inappropriate for this provision. 

Four commenters recommended 

replacing the country scope ‘‘E:2, Sudan 

and Syria’’ with ‘‘E:1’’ throughout TMP. 

BIS agrees that this expression is clearer 

and has made this change. 

One commenter requested that the 

requirement for personal inspection of 

body armor be dropped. In this final 

rule, BIS has dropped the entire 

paragraph relating to body armor. The 

issue will be addressed in a future final 

rule that will address controls on 

personal protective equipment. 

This rule updates the provision 

authorizing certain tools of the trade for 

Sudan by removing outdated technical 

parameters and ECCN paragraph 

references that no longer exist. 

Consistent with § 123.19 of the ITAR, 

this rule adds a note to the temporary 

imports paragraph of License Exception 

TMP stating that a shipment originating 

in Canada or Mexico that incidentally 

transits the United States en route to a 

delivery point in the same country does 

not require a license. BIS did not receive 

public comments on this note and 

adopts it as proposed in the June 21 

(transition) rule. A note regarding 

shipments from one location in the 

United States to another location in the 

United States via a foreign country, also 

proposed in the June 21 (transition) 

rule, was not adopted in this final rule. 

BIS received no comments on this note, 

but, upon further review and 

interagency consultation, BIS 

determined that the concept is already 

implicit in § 734.2(b)(8). Therefore, BIS 

deleted the proposed note. 

An additional note explaining that 

defense articles on the USMIL are 

controlled by the Bureau of Alcohol, 

Tobacco, Firearms and Explosives (ATF) 

for purposes of permanent import under 

its regulations at 27 CFR part 447, 

proposed in the June 21 (transition) 

rule, was not adopted because it 

duplicates the USMIL description added 

to part 734 (described above). 

Three commenters requested 

confirmation that § 740.9 (b)(3) applies 

to technology. BIS confirms that it does; 

technology is a component of the 

definition of ‘‘items,’’ as defined in 

§ 772.1. 

C. License Exception RPL 

In the July 15 (framework) rule and 

the June 21 (transition) rule, BIS 

proposed changes to § 740.10 (Servicing 

and replacement of parts and equipment 

(RPL)). The July 15 (framework) rule 

proposals all related directly to 

servicing and replacement of ‘‘600 

series’’ items. The June 21 (transition) 

rule proposals were related to a similar 

ITAR exemption. 

In the July 15 (framework) rule, BIS 

proposed revising RPL to: (1) Add ‘‘600 

series’’ ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ to the 

scope of this authorization; (2) impose 

restrictions on the use of License 

Exception RPL for the export or reexport 

of ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ 

classified in ‘‘600 series’’ ECCNs; (3) 

authorize exports and reexports of 

certain items ‘‘subject to the EAR’’ to or 

for a defense article described in an 

export or reexport authorization issued 

under the authority of the AECA; and 

(4) exclude from authorization the 

export or reexport of ‘‘parts,’’ 

‘‘components,’’ accessories,’’ or 

‘‘attachments’’ that are defense articles 

identified on the USML (22 CFR 

§§ 120.6 and 121.1). In this final rule, 

BIS adopts all of these proposals. 

One commenter to the July 15 

(framework) rule suggested that 

‘‘accessories’’ and ‘‘attachments’’ be 

removed from License Exception RPL, 

as they are by definition not necessary 

for items’ operation. BIS does not agree 

with this suggestion, as servicing and 

replacement of ‘‘accessories’’ and 

‘‘attachments’’ may be within the scope 

of transactions conducted under this 

license exception and thus should be 

authorized. 

The June 21 (transition) rule proposed 

to revise RPL to allow export or reexport 

of spares up to $500 in total value, and 

to remove the requirement that the 

ability to return serviced commodities 

and software or replace defective or 

unacceptable U.S.-origin equipment be 

limited to the original exporters. BIS is 

not adopting these proposals at this 

time, for the reasons explained below. 

Six commenters addressed this 

proposal, most requesting clarification 

of the relationship between the 

shipment of spares under proposed 

revised RPL and low-value shipments 

under existing License Exception LVS. 

Two commenters proposed different 

ways of valuing the spares or suggested 

placing a value limit on the item 

shipped or the transaction rather than 

the shipment. One comment 

recommended restructuring the 

exception into separate paragraphs for 

spares as distinguished from one-for-one 

replacement parts, and another 

comment recommended numerous 

changes, amounting to a thorough 

revision of the license exception. 

Additionally, in response to the July 15 

(framework) rule, BIS received a 

comment recommending that RPL 

define enhancement resulting from 

servicing or replacement of parts or 

components as ‘‘affecting a controlled 

characteristic of an end item.’’ 

Unlike License Exceptions TMP and 

GOV, BIS did not propose a wholesale 

clarification and streamlining of RPL in 

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the June 21 (transition) rule. Based on 

public comments and internal analysis, 

however, BIS has concluded that a 

completely revised RPL should be 

proposed separately as part of a 

retrospective regulatory review, using 

public comments already received as 

part of the basis for the new proposal. 

While the June 21 (transition) rule 

proposal to amend RPL was related to 

a similar ITAR exemption, it was not 

specific to the ‘‘600 series.’’ As such, 

and because BIS plans to propose 

comprehensive revisions to RPL, this 

final rule adopts only the changes to 

RPL proposed in the July 15 

(framework) rule. It does not adopt 

changes proposed in the June 21 

(transition) rule or address comments 

received in response to those proposed 

changes in this final rule. 

D. License Exception GOV 

Consistent with the retrospective 

review and regulatory improvement 

directed in Executive Order 13563, the 

June 21 (transition) rule proposed to 

completely revise § 740.11, License 

Exception GOV (Governments; 

International Organizations; 

International Inspections under the 

Chemical Weapons Convention; and the 

International Space Station). Prior to the 

effective date of this rule, License 

Exception GOV contained references to 

items on the Wassenaar Arrangement’s 

Sensitive and Very Sensitive Lists, 

which necessitated annual regulatory 

revisions and was so lengthy that it 

required a supplement to the section. 

The June 21 (transition) rule proposed 

shortening and simplifying License 

Exception GOV by including the 

Sensitive and Very Sensitive Lists as 

supplements to part 774, described 

below in Section XXIV.F. BIS received 

no public comments on this 

simplification, and this final rule adopts 

it without change. 

The July 15 (framework) rule 

proposed restricting certain ‘‘600 series’’ 

items’ eligibility for License Exception 

GOV, and the November 7 (aircraft) rule 

proposed changes with respect to 

restricting certain aircraft-related 

software and technology as listed in a 

proposed Supplement No. 4 to part 740. 

The December 6 (gas turbine engines) 

rule added restrictions on certain 

engine-related software and technology 

to Supplement No. 4 to part 740. This 

final rule, however, does not adopt the 

proposal to include Supplement No. 4 

to part 740, and instead incorporates 

these restrictions into the relevant 

ECCNs for ease of use, as described 

below in Sections XXIV.C and .D. 

As proposed in the June 21 

(transition) rule, this rule expands GOV 

to authorize items consigned to nongovernmental end users, such as U.S. 

Government contractors, acting on 

behalf of the U.S. Government in certain 

situations, subject to written 

authorization from the appropriate 

agency and additional export clearance 

requirements. One commenter on the 

June 21 (transition) rule noted its 

agreement with BIS’s proposal to extend 

GOV to U.S. Government contractors. 

Two commenters on the June 21 

(transition) rule suggested that the 

requirement for written authorization be 

deleted in favor of relying on the actual 

contract, noting that certification is a 

burden on both the exporter and on the 

Department of Defense, and that OFAC’s 

Sudanese Sanctions Regulations (31 

CFR part 538) are less restrictive with a 

similar purpose. Another commenter 

requested confirmation that the 

exception includes subcontractors 

under certain contract clauses, and 

asked that the final rule include 

examples and scenarios. This final rule 

adopts as proposed the requirement for 

written authorization and does not 

allow use of the license exception by 

subcontractors. Given the broad scope of 

items authorized under the GOV license 

exception, written authorization and a 

direct relationship between the exporter 

and the U.S. Government is necessary to 

ensure proper use of the exception. BIS 

does not include examples in this final 

rule, but will attempt to generate such 

scenarios to include in outreach efforts. 

Four commenters recommended that 

references to A:1 countries, a narrow 

group of close allies, be replaced with 

‘‘Wassenaar member countries,’’ a 

broader group. Another commenter 

recommended expanding the provisions 

available for cooperating governments to 

include all of Country Group B. Given 

the broad scope of items authorized 

under the GOV license exception, BIS 

considers the suggested changes to the 

country scopes too broad, and therefore 

does not accept them. 

One commenter recommended 

deletion of the requirement for a 

statement that the U.S. Government 

owned the property being exported 

because it was too broad. BIS agrees and 

has limited the requirement to 

Government Furnished Equipment. In 

response to a request for clarification of 

the scope of a provision describing 

programs related to capacity-building 

and counterterrorist operations, BIS 

determined that the provision was 

subsumed by a less specific provision 

describing cooperative efforts with 

foreign governments or international 

organizations, and deleted the unclear 

provision. 

This rule also adopts provisions for 

exports made under the direction of the 

U.S. Department of Defense consistent 

with §§ 125.4(b)(1), 125.4(b)(3) and 

126.6(a) of the ITAR. This provision was 

proposed in the June 21 (transition) rule 

and received no comments. 

The June 21 (transition) rule proposal 

to add a note regarding authorization of 

Foreign Military Sales is not adopted in 

this final rule. Authorization of Foreign 

Military Sales is addressed above in 

section III.B. 

This rule adopts provisions in the 

June 21 (transition) rule that expands 

the scope of countries eligible to receive 

items on the Sensitive List under 

§ 740.11(a) (International Safeguards) 

and (c) (Cooperating Governments) to 

include the governments of those 36 

countries listed in new Country Group 

A:5, discussed below in Section XI.H. 

BIS received no comments on this 

proposal. 

This rule makes one correction to 

GOV as proposed in the June 21 

(transition) rule. Section 

740.11(b)(2)(iii)(G) has been amended to 

remove ‘‘defense articles’’ from the 

parenthetical in that paragraph since 

BIS does not have jurisdiction over 

items subject to the ITAR. 

E. License Exception TSU 

This rule implements revisions 

proposed in the June 21 (transition) rule 

to § 740.13 License Exception 

Technology and Software—Unrestricted 

(TSU) that would include training 

information in the operation technology 

authorized, as it is in § 125.4(b)(5) of the 

ITAR. This rule also adds TSU 

authorization for the release of software 

source code and technology in the 

United States by U.S. universities to 

their bona fide and full-time regular 

foreign national employees to 

correspond with a similar authorization 

in § 125.4(b)(10) of the ITAR. Further, 

this rule amends TSU to add an 

authorization corresponding to 

§ 125.4(b)(4) of the ITAR for copies of 

technology previously authorized for 

export to the same recipient. 

Two commenters stated that the 

revised TSU for university employees 

should not be subject to the end-use and 

end-user restrictions in part 744 of the 

EAR because such restrictions do not 

now exist in the comparable ITAR 

exemption at § 125.4(b)(10). In addition, 

the commenters said that TSU should 

not preclude the unlicensed release of 

encryption-related software controlled 

for ‘‘EI’’ and other software and 

technology controlled for ‘‘MT’’ (Missile 

Technology) reasons because ITAR 

§ 125.4(b)(10) does not now preclude 

the release of such software and 

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technology to bona fide university 

employees under the exemption. This 

rule does not make the suggested 

revisions. While license exceptions 

under the EAR should not be more 

restrictive than corresponding 

exemptions under the ITAR, license 

exceptions must be implemented within 

the framework of the EAR. The 

restrictions proposed in the transition 

rule are consistent with those imposed 

on other license exceptions for national 

security and foreign policy reasons, and 

restrictions on MT items are statutory. 

Another commenter recommended that 

the provision be extended to entities 

other than universities. BIS does not 

accept this recommendation. This 

provision broadened TSU to correspond 

with an ITAR exemption for university 

employees; its expansion to other 

entities would exceed that rationale. 

One commenter suggested that the 

university employee’s requirement not 

to transfer technology survive his 

employment at the university; BIS 

agrees, because export controls on 

technology exist independently of 

nondisclosure or other agreements. 

Another commenter suggested striking 

the prohibition on ‘‘establishing or 

producing items,’’ because the phrase is 

not uniquely defined in the EAR and 

does not provide clarity about what it 

excludes. BIS agrees with this analysis 

and has made this revision. 

With respect to paragraph (g), one 

commenter suggested deleting ‘‘copies’’ 

from the heading and revising the text 

accordingly. BIS does not accept this 

recommendation. ‘‘Copies’’ is an 

accurate description of the intended 

scope of the provision. 

F. License Exception STA 

This final rule describes how and 

under what circumstances License 

Exception STA may be used for ‘‘600 

series’’ items. This rule implements the 

proposals regarding License Exception 

STA that appeared in the July 15 

(framework) rule, the November 7 

(aircraft) rule and the June 21 

(transition) rule. Generally, License 

Exception STA will be available for 

exports, reexports and transfers (incountry) of ‘‘600 series’’ items to any of 

the 36 destinations currently listed in 

§ 740.20(c)(1) (which this rule will move 

to a new Country Group A:5 in 

Supplement No. 1 to part 740), but not 

to the destinations currently in 

§ 740.20(c)(2) of the EAR (which this 

rule will move to a new Country Group 

A:6 in that supplement). As with all 

license exceptions in the EAR, its use is 

optional. If an exporter, for example, 

prefers to export an item otherwise 

eligible to be exported under License 

Exception STA under the authority of a 

license, then the exporter may apply for 

such a license. 

License Exception STA may not be 

used for any ‘‘600 series’’ items 

identified in the relevant ECCN as not 

being eligible for export under STA. It 

may not be used to export, reexport, or 

transfer (in-country) ‘‘600 series’’ items 

to persons, whether non-governmental 

or governmental, unless those persons 

are in and, if natural persons, nationals 

of a country listed in Country Group A:5 

or the United States and either (a) the 

ultimate end user for such items is the 

armed forces, police, paramilitary, law 

enforcement, customs, correctional, fire, 

or a search and rescue agency of a 

government of one of the countries 

listed in Country Group A:5 or the 

United States Government, or (b) are for 

the ‘‘development’’ or ‘‘production’’ of 

an item in one of the countries listed in 

Country Group A:5 or the United States 

that will ultimately be used by any such 

government agencies, the United States 

Government, or a person in the United 

States. It may not be used to export, 

reexport, or transfer (in-country) end 

item aircraft described in ECCN 9A610.a 

until after BIS has approved their export 

under STA under the procedures set out 

in § 740.20(g) of the EAR. It may not be 

used to export, reexport, or transfer (incountry) ‘‘600 series’’ items ‘‘subject to 

the EAR’’ if they are ‘‘600 Series Major 

Defense Equipment’’ and the value of 

such items in the contract requiring 

their export exceeds $25,000,000. This 

rule also will add provisions to the 

License Exception STA consignee 

statement that will apply only to 

shipments containing ‘‘600 series’’ 

items. The consignee will have to 

acknowledge the end-use and consignee 

restrictions that apply to ‘‘600 series’’ 

shipments under License Exception 

STA and consent to U.S. Government 

post-shipment verifications. 

BIS is implementing these changes to 

License Exception STA with respect to 

‘‘600 series’’ items because such items 

are, by definition, military items or 

specially designed for military 

applications and thus warrant controls 

beyond those dual-use and civil items 

eligible for export under STA. This 

revised License Exception STA will 

enhance national security because it 

will, with respect to such items, (a) 

allow for greater interoperability 

between the United States and its NATO 

and other multi-regime allies because it 

will permit more efficient and quick 

trade in such items than is now possible 

under the ITAR, (b) enhance the United 

States industrial base by reducing the 

incentive for buyers in such countries to 

avoid or design out such U.S.-origin 

content and, thus, create more 

opportunities to be regular, predictable 

suppliers to buyers in such countries, 

(c) allow the government to focus its 

limited licensing resources on 

transactions of concern rather than 

those that are routinely approved, and 

(d) allow for greater enforcement- and 

compliance-related visibility into such 

transactions. 

BIS received several comments 

concerning License Exception STA as it 

applies to ‘‘600 series’’ items. The 

comments and BIS’s responses are 

summarized below. 

One commenter noted that, in some 

instances, ‘‘600 series’’ ‘‘components’’ 

could be sent to an STA eligible 

destination for incorporation into an 

end item that would be exported to a 

non-STA eligible destination. One 

commenter requested that BIS ‘‘preapprove’’ such end items for de minimis 

treatment. Another commenter stated its 

belief that License Exception STA may 

not be used to export a part that will be 

incorporated into an end item that will 

be shipped to a non STA eligible 

destination. This commenter asked that 

BIS clarify that the exporter of the ‘‘600 

series’’ part could list the manufacturer 

of the end item as the end user on a 

license application because the end item 

would not be subject to the EAR. 

License Exception STA states that 

‘‘600 series’’ items must be for ultimate 

government end-use to be eligible. If a 

‘‘600 series’’ part or component to be 

exported is destined for ultimate end 

use by a government that is not among 

the STA–36 or the United States, then 

a license is required to export the part 

or component. However, there may be a 

third scenario in which items are not 

destined for end use in an STA–36 

country but are destined for an end use 

that has been explicitly authorized by 

the U.S. Government. To address this 

scenario, BIS has made a change to STA 

as discussed below in Section XI.G. 

One commenter stated that paragraph 

(c)(1) in License Exception STA appears 

to exclude from STA all ECCNs that 

have antiterrorism as a reason for 

control. This same commenter 

expressed a belief that only 

governments would be eligible 

recipients of ‘‘600 series’’ items under 

License Exception STA. The commenter 

noted that the latter limit could 

seriously disrupt supply chain activity 

because licenses would be needed to 

supply vendors who supply STA 

eligible governments. 

BIS believes that this commenter 

misconstrues the terms of License 

Exception STA as proposed in the July 

15 (framework) rule, the November 7 

(aircraft) rule and the June 21 

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(transition) rule. Paragraph (c)(1) of 

§ 740.20 refers to ‘‘Exports, reexports 

and in country transfers in which the 

only applicable reason for control is 

. . ..’’ This text in the June 21 

(transition) rule is unchanged from the 

current text of paragraph (c)(1), except 

in that it identifies the authorized 

destinations and nationals by Country 

Group A:5. BIS has consistently 

construed the phrase ‘‘applicable reason 

for control’’ to mean the reasons for 

control that would impose a license 

requirement on the export, reexport or 

in country transfer at issue, not every 

reason for control that appears in the 

ECCN that covers the item being 

shipped. In accordance with part 742, 

AT controls do not apply to any 

destination for which License Exception 

STA is available. As proposed in the 

July 15 (framework) rule and the 

November 7 (aircraft) rule, this rule 

makes private sector parties eligible 

recipients of ‘‘600 series’’ items 

exported under License Exception STA 

if the ‘‘600 series’’ item is for ultimate 

end use by a designated agency of an 

eligible government or for development, 

production, operation, installation, 

maintenance, repair, overhaul, or 

refurbishing in an eligible country or the 

United States for use by such a 

government agency or by the United 

States Government. Because ‘‘600 

series’’ ECCNs do not specify controls 

on ‘‘use’’ software or technology, the 

term ‘‘use’’ does not appear for those 

items in this license exception. 

The June 21 (transition) rule 

contained a note 2 to paragraph (c) 

providing that License Exception STA 

may authorize export, reexport or in 

country transfer of ‘‘600 series’’ items 

only if the purchaser, intermediate 

consignee, ultimate consignee and end 

user have previously been approved on 

a license issued by BIS or the 

Directorate of Defense Trade Controls. 

This proposal elicited a number of 

questions and comments. 

Commenters wanted to know whether 

the previous license had to be for the 

same commodity as will be shipped 

under License Exception STA, whether 

the validity of the prior license for 

purposes of STA eligibility continues 

after the name of the party changes and 

whether the prior license for a party 

authorized use of License Exception 

STA for all locations of that party 

within one country. 

The purpose of this requirement is to 

provide some assurance that the foreign 

parties in transactions involving ‘‘600 

series’’ items under License Exception 

STA are reliable as evidenced by the 

fact that either BIS or DDTC have 

approved licenses for transactions in 

which that party was involved. Plans to 

export under License Exception STA a 

different item than that under previous 

licenses do not alter the fact that the 

U.S. Government had vetted through the 

licensing process the foreign parties at 

issue in the transaction. Also not 

affecting the conclusion that the U.S. 

Government has vetted a foreign party 

through the licensing process is if the 

company changes its name or has offices 

at various addresses. Because the 

approval must have been for the party 

that will receive items under STA, an 

approval for a different entity, even if it 

is related to or affiliated with that party, 

would not meet the requirements for 

note 2 to paragraph (c)(1). BIS believes 

that no changes are needed to the text 

proposed in the June 21 (transition) rule 

to implement these points. 

One commenter asked whether 

exporters would be required to provide 

the information about approved parties 

and, if so, specifically what information 

would have to be provided and how 

often would it have to be provided. The 

commenter suggested that the exporter 

should be required to provide the 

information only for the initial export 

under License Exception STA to the 

party. 

The June 21 (transition) rule did not 

propose any requirement that the 

exporter report to BIS information about 

the prior licenses. As with other license 

exceptions, by entering STA (or the 

corresponding AES license code) into 

AES, the exporter represents to the 

United States Government, subject to 

penalties for false statements, that all of 

the requirements of License Exception 

STA have been met. In addition, parties 

to transactions that are subject to the 

EAR must provide BIS or other 

authorized U.S. Government agency 

with documents relating to the 

transaction upon request. BIS believes 

that no change to the text as proposed 

in the June 21 (transition) rule is needed 

on this point. 

Some commenters noted that parties 

wishing to use STA would not have 

access to licensing records from which 

they could determine whether the party 

to which they wish to ship under 

License Exception STA had previously 

been on an approved license. These 

commenters recommended several 

changes to address this issue. One 

recommendation was to remove the 

requirement because ordinary screening 

of customers as part of company 

compliance programs should be 

adequate and, especially with exports to 

close allies, additional measures should 

not be needed. Another 

recommendation was that the 

government, which has all the licensing 

records needed to determine whether a 

party was on a previously approved 

license, could provide the information 

(including known name changes) on a 

Web site. Additionally, the government 

could implement a procedure whereby 

AES could notify an exporter who 

wishes to use License Exception STA 

for a ‘‘600 series’’ item that the 

consignee is not an eligible recipient. 

Such a notice could be based on the fact 

the consignee has not previously 

appeared on an approved license or on 

other non-public information that the 

government possesses. 

Items in the ‘‘600 series’’ are military 

items or items that are designed for 

military application. Although they are 

less significant military items that the 

President has determined do not 

warrant control on the USML, they 

nonetheless, as military items, warrant 

export under more extensive safeguards 

against diversion than are applied to 

some of the other items that are subject 

to the EAR. The presence of a party on 

a previous license provides such a 

safeguard for such items because it 

indicates that the United States 

Government has reviewed that party 

and approved a transaction in which 

that party participated. Although 

providing access to the information 

obtained in connection with a license 

application about the identity of parties 

on approved licenses to the public via 

a Web site would likely make use of 

License Exception STA for ‘‘600 series’’ 

items easier, Section 12(c) of the Export 

Administration Act precludes such 

disclosure absent a finding that doing so 

is in the national interest. Given the 

widespread access to items posted on 

public Web sites, including access by 

persons not intending to use License 

Exception STA, such a finding would be 

unlikely. Attempting to modify AES in 

the way suggested is not yet feasible. 

Moreover, AES filings for ‘‘600 series’’ 

items will take place shortly before the 

time of export. An exporter relying on 

AES to screen out ineligible consignees 

would have done all of the work 

necessary for an STA shipment 

including furnishing the ECCN(s) to and 

obtaining the required statement from 

the consignee only to find out almost at 

the moment of shipment that the 

consignee is not eligible. BIS expects 

that, in most instances, a consignee that 

is willing to make the commitments and 

certifications required under License 

Exception STA will also be willing to 

confirm to the potential exporter, 

reexporter or transferor whether it has 

been a party on any approved licenses. 

Accordingly, BIS is making no 

substantive changes to the note to 

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22674 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

paragraph (c)(1) in response to these 

comments. (See Section XX below for 

recordkeeping requirements.) 

The June 21 (transition) rule would 

require consignees of ‘‘600 series’’ items 

to state that the items are for ultimate 

end use (or will be used in 

development, production, use, 

operation, installation, maintenance, 

repair, overhaul, or refurbishing of an 

item for ultimate end use) by an 

authorized government agency or a 

person in the United States; and to 

consent to an end-use check. One 

commenter questioned whether a 

private consignee would be able to 

consent to an end-use check on a 

government end user. 

BIS agrees that a private party should 

not be expected to make a commitment 

on behalf of a government. In addition, 

the governments eligible to ultimately 

receive ‘‘600 series’’ items under 

License Exception STA were selected 

because of their status as NATO allies 

of the United States or multi-regime 

members. Therefore, this final rule 

revises the requirement to make clear 

that only a non-government consignee is 

required to consent to an end-use check. 

In such an instance, BIS recognizes that 

because a condition of STA is that ‘‘600 

series’’ items must ultimately go to an 

authorized government end user or a 

user in the United States, the items may 

no longer be on the consignee’s 

premises. Nevertheless, an end use 

check at the consignee’s premises may 

provide information that would help 

confirm the ultimate disposition of the 

items. 

G. Other License Exception STA 

Changes 

The November 7 (aircraft) rule 

proposed creating a new Supplement 

No. 4 to part 740 that would list certain 

‘‘600 series’’ items that are not eligible 

for License Exception STA. Both the 

November 7 (aircraft) rule and the 

December 6 (gas turbine engines) rule 

proposed items for inclusion in this new 

supplement. Upon reflection, BIS has 

concluded that listing these ineligible 

items in the ECCNs to which they apply 

will make the ineligible items more 

readily apparent to readers than will 

listing them in a separate supplement. 

Accordingly, this rule does not list these 

items in a supplement as proposed, but 

in ECCNs 9D610, 9E610, 9D619 and 

9E619. This change is purely one of 

format. The ineligible items listed in 

those four ECCNs are the same as those 

proposed in the November 7 (aircraft) 

rule and the December 6 (gas turbine 

engines) rule. 

The conditions under which License 

Exception STA may be used have been 

revised to allow for situations where the 

United States would, for national 

security, foreign policy, or other 

reasons, explicitly authorize its use in 

circumstances not yet contemplated. In 

response to the June 21 (transition) rule, 

commenters requested that BIS allow for 

the use of STA to authorize certain 

exports in situations in which the 

exporter knows that the items may be 

reexported to both STA–36 and nonSTA–36 destinations. This new 

provision is designed to give the U.S. 

Government, through the normal 

interagency license review process, 

flexibility to craft license authorizations 

and conditions to address atypical fact 

patterns and allow for the use of STA in 

situations that would not otherwise be 

authorized. For example, a foreign 

consignee may receive a U.S. 

Government authorization to reexport 

from an STA–36 country a foreign-made 

item containing controlled U.S.-origin 

content. The new provision would 

allow the continued use of STA for 

exports of controlled items to a foreign 

consignee in one of the STA–36 

countries so long as the foreign 

consignee has a valid license 

authorizing such a use of STA. The 

consignee would need to certify that it 

has such a license and, in addition, 

provide a copy of it to the U.S. exporter 

before License Exception STA may be 

used. 

H. Country Groups 

This rule creates three new country 

groups in part 740 of the EAR following 

consideration of public comments 

described below recommending 

reorganization of various lists of 

countries in the EAR. Specifically, this 

rule adds two new columns to Country 

Group A to incorporate the lists of 

countries previously set forth in the text 

of License Exception STA, and it adds 

one new column to Country Group D to 

incorporate the list of countries subject 

to a U.S. arms embargo proposed in the 

July 15 (framework) rule to be set forth 

in § 740.2. Several commenters 

addressed the various groupings of 

countries in the EAR and noted possible 

ways to reduce the number of such 

groupings or highlighted areas where 

the current groupings and those 

proposed in the June 21 (transition) rule 

could be simplified. One commenter 

noted that many such groupings were 

nearly identical to each other and to 

existing Country Groups in Supplement 

No. 1 to part 740 of the EAR. This 

commenter suggested that several such 

groupings be replaced by existing 

country groups. This commenter also 

recommended that certain countries 

listed in § 740.2(a)(12) of the transition 

rule that currently are subject to limited 

exceptions to the policy of denial under 

§ 126.1 of the ITAR be removed from 

§ 740.2(a)(12) in the final rule; BIS did 

not accept this recommendation because 

BIS believes it is appropriate to limit the 

use of license exceptions to countries 

subject to a U.S. arms embargo as a 

matter of foreign policy. One commenter 

suggested that the countries currently 

listed in § 740.2(a)(6) could be 

combined with the countries listed in 

proposed § 740.2(a)(12) with a single de 

minimis level for both groups. Other 

commenters recommended a 10% de 

minimis level for both § 740.2(a)(6) and 

§ 740.2(a)(12) countries. A commenter 

also substituted the term STA–36 for 

references to destinations listed in 

§ 740.20(c)(1), demonstrating the 

usefulness of a shorthand reference for 

this group of countries. 

BIS recognizes that a number of the 

country groupings in the EAR are 

similar to each other and to the Country 

Groups in Supplement No. 1 to part 740 

of the EAR. The small differences 

between some of these country 

groupings reflect the fact that each 

country grouping generally implements 

a policy tailored to certain destinations 

that do not exactly match the broad 

Country Groups in Supplement No. 1 to 

part 740. A comprehensive revision of 

country groupings in the EAR is outside 

the scope of this rule, but BIS 

acknowledges that it is an appropriate 

subject to be examined in the future as 

part of a retrospective review. 

In addition, the countries listed in 

§ 740.2(a)(6) are countries that are 

subject to broad export controls and, in 

some cases, comprehensive embargoes 

that encompass items of no military 

significance. The countries listed in 

§ 740.2(a)(12) of the proposed transition 

rule are subject to United States arms 

embargoes. Moreover, paragraph (a)(6) 

applies to all items that are subject to 

the EAR whereas paragraph (a)(12) 

applies to the distinctly military items 

that are in ‘‘600 series’’ ECCNs. BIS 

believes that the distinctly military 

nature of ‘‘600 series’’ items justifies a 

stricter de minimis treatment compared 

to the broader universe of items that are 

subject to the EAR, and thus BIS does 

not adopt the commenter’s suggestion. 

Although not adopting their specific 

recommendations, BIS believes that 

these commenters raised valid points 

concerning the need for clarity in 

grouping countries in the EAR. 

Accordingly, this rule revises 

Supplement No. 1 to part 740 to add 

new columns A:5 and A:6 to Country 

Group A and to add a new column D:5 

to Country Group D. Column A:5 lists 

the 36 destinations that currently are in 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22675 

§ 740.20(c)(1), Column A:6 lists the 

eight destinations that currently are in 

§ 740.20(c)(2), and Column D:5 lists the 

destinations subject to a United States 

arms embargo that were listed in 

§ 740.2(a)(12) of the June 21 (transition) 

rule and July 15 (framework) rule. These 

changes are to format only and are not 

intended to change any controls. 

XII. Part 742—Control Policy 

A. National Security (NS) Review Policy 

In the July 15 (framework) rule, BIS 

proposed revising the review policy for 

license applications for items controlled 

for national security reasons by adding 

a new paragraph (b)(1)(ii) to § 742.4 of 

the EAR. The proposed rule stated that 

in addition to the policy set forth in 

existing paragraph (b)(1)(i) of § 742.4, 

items classified under the ‘‘600 series’’ 

ECCNs would be subject to a general 

policy of denial when destined to a 

country subject to a U.S. arms embargo. 

BIS received a comment on the 

proposed review policy that observed 

that such a policy would be more 

stringent than the policy for embargoed 

destinations and significant items under 

the ITAR. BIS has revised the proposed 

review policy in response to a 

commenter’s observation as further 

discussed below. 

To harmonize the EAR’s policy with 

that of the ITAR, a new paragraph 

(b)(1)(ii) to § 742.4 is adopted to state 

that when destined for a country listed 

in D:5 in Supplement No. 1 to Part 740 

of the EAR, items classified under ‘‘600 

series’’ ECCNs will be reviewed 

consistent with the United States arms 

embargo (§ 126.1 of the ITAR). Although 

‘‘600 series’’ items do not warrant 

control on the U.S. Munitions List, they 

are nonetheless items specially designed 

for military uses or applications or 

otherwise identified on the WAML and 

thus the stated review policy is 

appropriate. The scope of the U.S. arms 

embargoes is, however, not the same for 

each arms embargoed country. Section 

126.1 of the ITAR has a detailed 

description of the policies for each such 

country to which BIS will defer. 

One commenter noted that the 

proposed transition rule listed in 

§ 740.2(a)(12) all the countries in § 126.1 

of the ITAR, but that the preamble 

referred only to § 126.1(a) of the ITAR. 

Although at one point in its text, the 

preamble to the transition rule referred 

to § 126.1 of the ITAR, in other places 

it referred to § 126.1(a). While this 

comment referred to the section on 

restrictions on license exceptions, the 

issue is more strongly related to license 

review policy. BIS’s intent is to apply 

the general policy of denial for ‘‘600 

series’’ items to all destinations that are 

subject to a United States arms embargo. 

For this reason, BIS is not removing any 

destinations that are subject to limited 

exceptions found in other paragraphs of 

§ 126.1 from the list of arms embargoed 

destinations. The general policy of 

denial provides adequate discretion to 

approve a license when the interagency 

license application review process 

pursuant to Executive Order 12981, as 

amended, recommends doing so in 

accordance with the national security 

and foreign policy of the United States 

and if no other law prohibits such 

approval. In other words, BIS is 

maintaining the status quo for ‘‘600 

series’’ items to such destinations to 

conform to the State Department’s 

policy and practice. 

B. Regional Stability (RS) License 

Requirements 

The July 15 (framework) rule 

proposed to individually list each of the 

new ‘‘600 series’’ ECCNs that would be 

controlled for RS Column 1 reasons in 

§ 742.6(a)(1), which currently lists in a 

single sentence all ECCNs or portions 

thereof that are subject to the RS 

Column 1 controls of that paragraph. 

That framework was difficult to read 

and the listing of ECCNs duplicated 

information provided by the 

combination of ECCN entries and the 

Commerce Country Chart in 

Supplement No. 1 to part 738. This final 

rule simplifies and streamlines 

§ 742.6(a)(1), which provides that a 

license is required for items designated 

in their ECCNs as subject to RS Column 

1 controls to all destinations other than 

Canada, which is consistent with the 

format of describing other reasons for 

control in part 742. This change to 

§ 742.6(a)(1) is in format only; it does 

not alter the license requirements for 

any item that is subject to the RS 

Column 1 reason for control. New 

paragraph (a)(1) continues to exclude 

from its coverage items described in 

paragraphs (a)(2) or (a)(3) of § 742.6 

because those items are subject to their 

own special RS Column 1 controls. To 

conform to this rule’s removal of ECCN 

9A018.a, this rule revises § 742.6(a)(4)(i) 

to remove three references to ECCN 

9A018.a. 

C. RS Review Policy 

BIS proposed in the November 7 

(aircraft) rule to revise paragraph (b)(1) 

of § 742.6 to read that applications for 

‘‘600 series’’ ECCN items listed in 

paragraph (a)(1) and destined to a 

country subject to a U.S. arms embargo 

would be reviewed in accordance with 

U.S. arms embargo policies and 

generally would be denied. In addition, 

a general policy of denial for a regional 

stability (‘‘RS’’) column 1 reason would 

apply to license applications for 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ software, or technology 

‘‘specially designed’’ or otherwise 

required for F–14 aircraft. BIS revised 

the November 7 proposed license 

application review policy in paragraph 

(b)(1) for ‘‘600 series’’ ECCN items 

destined to U.S. arms embargoed 

countries, stating that such applications 

generally would be denied. BIS adopts 

in this final rule the same purpose and 

rationale described for the national 

security review policy in Section XII.A. 

above for the RS review policy, which 

is that when destined for a country 

listed in D:5 in Supplement No. 1 to 

Part 740 of the EAR, items classified 

under ‘‘600 series’’ ECCNs will be 

reviewed consistent with the United 

States arms embargo policies (§ 126.1 of 

the ITAR). 

The June 21 (transition) rule proposed 

that paragraph (b)(1) of § 742.6 be 

further revised to add a case-by-case 

review to determine whether the ‘‘600 

series’’ transaction is contrary to the 

national security or foreign policy 

interests of the United States, while 

retaining all provisions as published in 

a final rule which implemented the 

0Y521 ECCN series, published April 13, 

2012 (77 FR 22191). The June 21 

(transition) rule proposal for case-bycase review is adopted in this rule 

without change. 

XIII. Part 743—Special Reporting 

A. Conventional Arms 

The July 15 (framework) rule 

proposed to create a new semi-annual 

reporting requirement for ‘‘600 series’’ 

items that would be specifically 

identified in new § 743.4(c)(1) as items 

that require reporting under the 

Wassenaar Arrangement. One 

commenter described addition of this 

conventional arms reporting as 

‘‘premature’’ as it was ‘‘unlikely’’ to be 

applicable to any ‘‘600 series’’ items. 

BIS did not agree with this comment. 

The framework must be established for 

this reporting to abide by U.S. 

multilateral commitments. Section 

743.4 is adopted as it was proposed in 

the July 15 (framework) rule. 

B. Major Defense Equipment 

As set forth in § 123.15 of the ITAR, 

Section 36(c) of the Arms Export 

Control Act requires that a certification 

be provided to the Congress prior to 

approval of certain high-value exports of 

major defense equipment, other defense 

articles, or firearms. Approvals may not 

be granted when the Congress has 

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enacted a joint resolution prohibiting 

the export. While this process is not 

statutorily required for items subject to 

the EAR, BIS proposed in the June 21 

(transition) rule to institute similar 

procedures in the EAR for certain 

exports of items that were classified as 

Major Defense Equipment (MDE) under 

the ITAR and are now subject to the 

EAR. BIS is adopting these procedures 

for certain exports of MDE in this final 

rule. ‘‘600 Series Major Defense 

Equipment’’ means any item listed in 

ECCN 9A610.a, 9A619.a, 9A619.b or 

9A619.c, which has nonrecurring 

research and development costs of more 

than $50,000,000 or total production 

cost of more than $200,000,000. The 

Defense Security Cooperation Agency 

(DSCA) maintains a list of MDE items, 

currently categorized by USML 

category, available online at http:// 

www.dsca.osd.mil/samm/ESAMM/ 

Appendix01.htm (‘‘DSCA List’’). 

This final rule adopts the July 15 

(framework) rule proposal to create a 

new § 743.5, which provides that BIS 

will notify the Congress of transactions 

that include ‘‘600 Series Major Defense 

Equipment’’—i.e., any ‘‘600 series’’ 

items identified on the DSCA List— 

valued in excess of $14,000,000 for 

destinations outside of the new Country 

Group A:5 and $25,000,000 for 

destinations listed in the new Country 

Group A:5. Notification will not be 

required for exports made under License 

Exception GOV. When a license 

application is submitted, BIS will draw 

the necessary information to make the 

congressional notification from the 

license application. Section 740.2, 

Restrictions on License Exceptions, 

discussed above, is also revised to 

preclude use of license exceptions, 

other than License Exception GOV, for 

such transactions. 

BIS received eleven comments on the 

congressional notification proposal. In 

general, the commenters complained 

that notification would be cumbersome 

and defeat many of the potential 

efficiencies of the EAR for transitioned 

items. The commenters also asserted 

that congressional notification is not 

required for items subject to the EAR. 

BIS does not agree with such comments. 

BIS recognizes that congressional 

notification procedures may impose a 

regulatory burden for some export 

transactions. However, BIS is not 

requiring notification for any 

transactions that would not now require 

notification under the ITAR and the 

Arms Export Control Act. Thus, there 

will be no increased burden on 

exporters as a result of the new 

notification requirements in the EAR. 

Six commenters stated that the 

threshold for congressional notification 

should be based on the value of the 

‘‘600 series’’ items in the license 

application, not the total contract under 

which the items are sold. BIS accepts 

this recommendation. BIS recognizes 

that the total value of a contract that 

includes transitioned items may also 

include substantial sums for items 

subject to the ITAR or subject to the 

EAR, but which are not ‘‘600 Series 

Major Defense Equipment.’’ Therefore, 

to ensure that only transactions that 

include more than the applicable 

threshold of ‘‘600 Series Major Defense 

Equipment’’ items trigger the 

notification requirement, BIS is revising 

the notification requirement threshold 

to the value of the ‘‘600 Series Major 

Defense Equipment’’ items included in 

the contract. 

Five commenters requested that BIS 

specify that dual notification of a 

transaction is not required. BIS accepts 

the commenters’ request. If a transaction 

includes more than the threshold 

amount of ITAR MDE or other ITAR 

items triggering the ITAR congressional 

reporting requirement, and also triggers 

the BIS requirement due to the value of 

the ‘‘600 Series Major Defense 

Equipment’’ items, it would serve little 

purpose to require that both BIS and 

DDTC notify the Congress for the same 

transaction. Therefore, BIS is revising 

the notification requirement to state that 

transactions that have been, or are 

concurrently being, notified to the 

Congress by DDTC do not require 

congressional notification by BIS. One 

commenter also suggested that 

applicants must provide notice of prior 

notification by providing BIS with the 

Congressional Notification 

Identification Number on their 

application in SNAP–R. BIS agrees with 

the suggestion and has amended the 

EAR accordingly. BIS, however, will not 

approve the license for items subject to 

the EAR until the applicable period for 

congressional notification has expired. 

One commenter noted that the 

congressional notification procedures 

require that the exporter provide BIS 

with the written contract under which 

the items are being sold, and that this 

requirement is unique in the EAR. BIS 

acknowledges that the requirements that 

exporters whose transactions meet the 

thresholds for congressional notification 

to provide the written contract for the 

sale of the items is unique in the EAR. 

But, BIS believes that relatively few 

transactions will require congressional 

notification each year and that those 

transactions are of such a size that it is 

unlikely that they will be concluded 

without a written contract. 

Additionally, a written contract is 

required for these transactions under the 

ITAR, so there is no increase in 

regulatory burden. 

Four commenters requested that BIS 

include the definition of Major Defense 

Equipment in part 772. BIS accepts this 

recommendation and has included a 

definition in part 772. 

XIV. Part 744—End-User and End-Use 

Controls 

A. ‘‘Military End Use’’ in §§ 744.17 and 

744.21 

In the July 15 (framework) rule, BIS 

proposed amending the definition of 

‘‘military end use’’ used in § 744.17 

(Restrictions on certain exports and 

reexports of general purpose 

microprocessors for ‘military end uses’ 

and to ‘military end users.’) and 

§ 744.21 (Restrictions on certain 

‘military end uses’ in the People’s 

Republic of China (PRC)). In both 

sections, the definition of ‘‘military end 

use’’ was revised to include 

incorporation into items classified 

under ‘‘600 series’’ Product Groups A, B 

or C ECCNs and for the ‘‘use,’’ 

‘‘development,’’ or ‘‘production’’ of 

items classified under ‘‘600 series’’ 

Product Group A, B or C ECCNs. For 

consistency, BIS is making clarifying 

changes to the proposed language to 

ensure greater understanding of the 

scope of the provision. BIS received no 

public comments on these amendments 

to the military end use definition, and 

this final rule adopts the July 15 

(framework) rule’s proposal without 

substantive change. 

B. China Military End-Use Control 

In the June 21 (transition) rule, BIS 

proposed to make all ‘‘600 series’’ items 

subject to the China Military End Use 

provision set forth in § 744.21 through 

a new paragraph (a)(2), which provided 

a general prohibition on exports to 

China of ‘‘600 series’’ items without a 

license. One commenter to the June 21 

(transition) rule stated that this 

amendment would create an 

unnecessary burden for ‘‘600 series’’ 

paragraph .y items and that .y items 

should only be restricted for export to 

China if they are intended for a military 

end use. In addition, the commenter 

said that there is no need to restate the 

denial policy for non-.y ‘‘600 series’’ 

items because this is currently reflected 

in § 742.6 (Regional Stability). 

BIS does not agree with this 

recommendation, and is adopting the 

June 21 (transition) rule addition of 

paragraph (a)(2) without change. ‘‘600 

series’’ items were previously on the 

USML or the WAML and therefore are 

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presumptively for a military end use. 

Accordingly, BIS is imposing under 

§ 744.21 a license requirement for all 

‘‘600 series’’ items, including paragraph 

.y items, destined for China. Paragraph 

.y items are ‘‘specially designed’’ 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

and ‘‘attachments’’ for defense articles 

on the USML or for other military items 

(i.e., ‘‘600 series’’ items), and the 

definition of ‘‘military end use’’ in 

§ 744.21 includes incorporation into a 

military item. The commenter’s 

concerns regarding an unnecessary 

burden on paragraph .y items is 

outweighed by the national security 

need for a license requirement. As to the 

commenter’s concern regarding restating 

the denial policy with respect to other 

‘‘600 series’’ items, paragraph (a)(2) does 

not do this. Other ‘‘600 series’’ items are 

subject to multiple reasons for control 

on the CCL as well as to end-use and 

end-user controls, and different 

licensing review policies may apply. 

After interagency review, BIS is 

amending the proposed text in 

§ 744.21(f) removing references to 

‘‘Product Group A, B or C.’’ This change 

is intended to clarify the intent of the 

July 15 (framework) rule, which was to 

maintain the scope of current policy 

with respect to defense articles that will 

remain on the USML or defense articles 

that will transfer to the CCL as ‘‘600 

series’’ items. 

XV. Part 746—Embargoes and Other 

Special Controls 

A. Iraq 

The July 15 (framework) rule 

proposed to revise paragraph (b)(2) of 

§ 746.3 (Iraq) of the EAR to make ‘‘600 

series’’ items, which are arms or armsrelated, subject to the Iraq arms embargo 

provisions. No comments were received 

on this provision. This final rule revises 

that proposal by specifying that license 

applications for the export, reexport, or 

transfer to the Government of Iraq of 

‘‘600 series’’ items will be subject to the 

review policies set forth for such items 

in §§ 742.4(b) and 742.6(b) of the EAR 

to cross reference the review policies set 

forth in part 742 elsewhere in this rule. 

B. UN Embargoes 

In the July 23, 2012 final rule on 

Export and Reexport Controls to 

Rwanda and United Nations Sanctions 

Under the Export Administration 

Regulations (77 FR 42973), BIS 

amended § 746.1 to limit the use of 

license exceptions to countries subject 

to a United Nations Security Council 

arms embargo. The July 15 (framework) 

rule and the June 21 (transition) rule 

proposed restrictions in § 740.2(a)(12) 

on license exceptions for ‘‘600 series’’ 

items destined to countries subject to a 

U.S. arms embargo (a list that includes 

countries subject to United Nations 

Security Council arms embargoes). One 

commenter recommended that BIS make 

available license exceptions in addition 

to GOV for items being sent to countries 

subject to United Nations Security 

Council arms embargoes as 

implemented under the EAR. The 

commenter stated in support of the 

recommendation that some 

circumstances in which controls related 

to arms embargoes could be superseded 

by license exceptions was contemplated 

in a proposed amendment to paragraph 

(b)(3)(vi) (General Prohibition Three— 

Foreign-Produced Direct Product 

Reexports) of § 736.2 set forth in the 

June 21 (transition) rule. 

BIS does not agree with the 

commenter’s reasoning and is not 

adopting the recommendation. Part 746, 

as stated in § 746.1(a), is the focal point 

for all the EAR requirements for 

transactions involving sanctioned and 

embargoed countries. Thus, the 

availability of license exceptions to 

those countries is governed primarily by 

the provisions in part 746. This rule 

does amend § 746.1 to clarify that the 

availability of license exceptions for 

Iraq, North Korea, and Iran will 

continue in effect as set forth in § 746.3 

(Iraq), § 746.4 (North Korea), and § 746.7 

(Iran) rather than being governed by the 

more general restrictions being 

implemented in § 746.1. 

XVI. Part 748—Applications and 

Documentation 

A. Classification Requests To Confirm 

That Items Are Not ‘‘Specially 

Designed’’ 

In response to public comments 

received regarding the scope of the 

proposed definition of ‘‘specially 

designed’’ in the June 19 (specially 

designed) rule, this final rule adds a 

new paragraph (e) to § 748.3 

(Classification requests, advisory 

opinions, and encryption registrations) 

to establish a process whereby the 

public may submit classification 

requests to confirm that a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is not 

‘‘specially designed.’’ This new 

paragraph describes this process and 

identifies the criteria that must be met 

and the review criteria that will be used 

by the Departments of Commerce, State 

and Defense. A consensus 

determination of these three agencies is 

required to confirm that a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software,’’ is not 

‘‘specially designed’’ based on this new 

paragraph. The policy objective of this 

new provision is to replicate in the EAR 

the practice that the State and Defense 

Departments have adopted with respect 

to their consideration of commodity 

jurisdiction requests. Thus, the new 

paragraph (e) maintains the status quo 

with respect to the government’s 

consideration of the control status of 

items that may be within the scope of 

a ‘‘600 series’’ ECCN or other specially 

designed catch-all provision that might 

have once seemed to have been within 

the scope of one of the ITAR’s catch-all 

provisions. In other words, if the State 

Department would have issued a 

commodity jurisdiction determination 

that an item was not within the scope 

of one of the USML’s catch-all 

provisions and was not otherwise 

subject to the ITAR, then the Commerce 

Department, after interagency 

consensus, would issue a similar 

classification determination that the 

same item was not within the scope of 

a ‘‘600 series’’ ECCN. 

B. Unique Submission Requirements 

1. License Exception STA Eligibility 

Requests for ‘‘600 Series’’ Items 

The July 15 (framework) rule 

proposed a new paragraph (g) to 

§ 740.20 in License Exception STA that 

identified the requirements and process 

that would be used by license 

applicants to request License Exception 

STA eligibility for ‘‘600 series’’ ‘‘end 

items.’’ The public comments regarding 

License Exception STA were generally 

favorable, but some commenters made 

suggestions for how the process could 

be improved or simplified for these 

requests. 

Three commenters recommended that 

BIS allow applicants to submit License 

Exception STA eligibility requests either 

on their own or with an application for 

the export of the requested item. In the 

July 15 (framework) rule, BIS proposed 

that License Exception STA eligibility 

requests could only be submitted at the 

time of a license application to 

minimize the potential of a large 

number of submissions at one time. 

However, as the review of the USML 

Categories has been completed and the 

revised USML Categories and 

corresponding ‘‘600 series’’ ECCNs have 

been published in proposed form, BIS, 

along with the Departments of Defense 

and State, has determined that the 

universe of ‘‘600 series’’ ‘‘end items’’ 

that require a prior review from the U.S. 

Government should be limited to ECCNs 

8A609.a (vessels), 0A606.a (vehicles), 

and 9A610.a (aircraft); only ECCN 

9A610.a is included in this final rule 

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and BIS will create ECCNs 8A609.a and 

0A606.a in future final rules. All other 

‘‘600 series’’ ‘‘end items’’ will be 

automatically eligible for License 

Exception STA, although the exporter 

must still ensure that the item and other 

aspects of the transaction are not 

restricted under § 740.2 and the 

transaction meets the applicable terms 

and conditions of License Exception 

STA. There will nonetheless still be 

restrictions on the use of License 

Exception STA for various types of 

software and technology, as described 

below. 

Given this much smaller universe of 

‘‘600 series’’ ‘‘end items’’ that will 

require the submission of License 

Exception STA eligibility requests, BIS 

accepts the commenter’s 

recommendation to allow the public to 

submit License Exception STA 

eligibility requests at any time and will 

no longer require such requests to be 

submitted at the time of a license 

application requesting authorization for 

an export, reexport, or transfer (incountry). However, to assist in the 

tracking and efficient interagency 

review of such requests, these License 

Exception STA eligibility requests must 

be submitted via the BIS Simplified 

Network Application Process—Redesign 

(SNAP–R) system unless BIS authorizes 

submission via the BIS–748–P 

Multipurpose Application form. 

Accordingly, this final rule revises 

§ 748.1(d) to add License Exception STA 

eligibility requests to the list of 

applications that must be submitted via 

SNAP–R unless BIS authorizes paper 

submissions. In SNAP–R and on the 

BIS–748–P, a request for License 

Exception STA eligibility will be 

submitted as an export license 

application, but in the future these 

requests will be filed electronically as a 

separate work item type in SNAP–R. 

This will occur once the SNAP–R 

system is revised to accommodate STA 

eligibility requests as a separate work 

item type. These changes are limited to 

the process that will be used in SNAP– 

R for submitting License Exception STA 

eligibility requests. The types of 

information required to be submitted 

will be the same as that proposed in the 

July 15 (framework) rule. 

Upon reflection, BIS has determined 

that the July 15 (framework) rule’s 

proposal to list the ‘‘600 series’’ end 

items approved for STA in a newly 

proposed Supplement No. 4 to part 774 

would be unduly complex. As noted 

above, the end items in only three 

ECCNs will require a specific 

determination to be eligible for License 

Exception STA. Given this small 

number, BIS believes that readers of the 

regulations will find it easier to identify 

the approved end items if they are listed 

in their respective ECCNs rather than in 

a separate supplement. Accordingly, 

such end items will be listed in the 

ECCNs under which they are classified. 

To avoid a break in the series of 

supplements to part 774, in this final 

rule, Supplement No. 4 to part 774 

contains a description of the order of 

review of the CCL as discussed below. 

This final rule also makes some 

conforming changes in Supplement No. 

2 to part 748 (Unique Application and 

Submission Requirements) under the 

new paragraph (w) (License Exception 

STA eligibility requests for ‘‘600 series’’ 

end items) to conform to BIS’s decision 

not to add a new Supplement No. 4 to 

part 774. This final rule revises the first 

three sentences of paragraph (w) to 

specify that to submit an STA eligibility 

request the applicant must mark an (X) 

in the ‘‘Export’’ box in Block 5 (Type of 

Application); mark an (X) in the 

‘‘Other’’ box and insert the phrase ‘‘STA 

request’’ in Block 6 (Documents 

submitted with Application); and 

include the specific ‘‘600 Series’’ ECCN 

in Block 22 (ECCN). This final rule also 

removes the reference to Supplement 

No. 4 to part 774 and adds a reference 

to the ‘‘600 series’’ ECCN where such 

end items determined to be STA eligible 

through this new process would be 

identified on the CCL. Also to add 

greater specificity, this final rule uses 

the term ‘‘end item’’ for purposes of 

paragraph (w). 

This rule also adds two sentences to 

paragraph (w) to clarify that if an 

applicant cannot provide some of the 

information described under paragraph 

(w), the U.S. Government will still 

evaluate the request. This new text also 

clarifies that the U.S. Government will 

use resources and information that may 

only be available to the U.S. 

Government in evaluating License 

Exception STA eligibility requests, as a 

way to encourage applicants that even if 

they feel that they may not have 

information in certain areas that the 

U.S. Government will also use its 

resources and expertise in evaluating 

these requests. However, this new text 

also clarifies that when submitting such 

requests applicants should provide as 

much information as they can based on 

the criteria noted in paragraph (w) to 

assist the U.S. Government in evaluating 

these License Exception STA eligibility 

requests. Lastly, for the changes to 

paragraph (w), this final rule is 

removing the term ‘‘otherwise’’ before 

the phrase ‘‘or is available in countries 

that are not regime partners or close 

allies.’’ The term otherwise was not 

needed to convey the intended meaning 

of the sentence, so BIS removed it. 

One commenter recommended that 

the timeline for the review of License 

Exception STA eligibility requests 

should be similar to those set forth by 

§ 740.17(b)(2) for ENC classifications, 

where a determination would be made 

thirty days after the submission of the 

request. BIS does not accept this 

recommendation because these ‘‘STA 

requests’’ are not the same as requests 

for ENC classification, which consists 

more of a technical review. The STA 

eligibility requests involve not only a 

technical review of the end item but 

also a broader policy review to 

determine whether such end items 

should be eligible for License Exception 

STA. These ‘‘STA requests’’ are not part 

of a license application requesting an 

authorization for an export, reexport or 

in-country transfer. However, BIS has 

determined using the timelines set forth 

in Executive Order 12981 and § 750.4, 

as was proposed in the July 15 

(framework) rule, is the best approach to 

establish clear guidelines for the 

timeline for the interagency reviews 

conducted by the Departments of 

Commerce, State and Defense. 

One commenter requested ‘‘ECCN 

entry’’ be changed to ‘‘end item’’ in 

§ 740.20(g)(5)(i) because BIS is not 

making the entire ECCN eligible, but 

only a specific end item. BIS does not 

accept this change because in certain 

cases BIS may approve an ECCN entry 

for License Exception STA eligibility, 

but in other cases the end item 

approved for STA eligibility may be 

more narrowly defined. Therefore, BIS 

is not changing the ‘‘ECCN entry’’ as 

requested, but is adding ‘‘or end item’’ 

to add greater specificity. This will 

clarify that when BIS publishes final 

rules adding License Exception STA 

eligibility to the EAR for ‘‘600 series’’ 

end items, it may be done at the higher 

(i.e., more general description) ECCN 

level or specific end item level (e.g., a 

specific model number). 

Two other commenters requested BIS 

allow the STA eligibility requests to 

cover the entire ECCN subject to the 

request versus the specific end item in 

the request. BIS is not making the 

requested changes. As noted, the STA 

eligibility requests are not limited to a 

specific model and can be requested at 

the ECCN level or ECCN ‘‘items’’ 

paragraph level. However, BIS 

anticipates that initially the end items 

that are determined to be eligible for 

License Exception STA under the 

§ 740.20(g) process will likely be at the 

specific end item level. Over time as the 

U.S. Government has an opportunity to 

review more of these requests, it may be 

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possible that broader descriptions can 

be developed and authorized for License 

Exception STA. However, to protect 

U.S. national security interests a review 

of the end items classified in ECCN 

9A610.a must be made by the U.S. 

Government prior to any of those end 

items being determined to be eligible for 

License Exception STA. 

Two commenters requested BIS 

provide applicants with an opportunity 

to participate in unclassified 

interagency discussions on their License 

Exception STA eligibility requests 

similar to the opportunity to participate 

in open sessions of interagency 

discussions associated with the 

interagency licensing review process. 

BIS does not need to make any 

regulatory changes to address this 

comment. Requesters who submit ‘‘STA 

requests’’ under § 740.20(g) are 

participating in the review process in an 

important way. Therefore, such 

requesters are encouraged to submit any 

information that they believe would be 

relevant to the U.S. Government review 

of the License Exception STA eligibility 

requests. In reviewing and evaluating 

such requests, if BIS or one of the other 

departments has a question regarding 

what was submitted, a representative 

from BIS will likely contact the 

applicant through SNAP–R to request an 

answer to the specific question or 

request additional information. This 

process is similar to the typical level of 

applicant participation that occurs in 

the license application review process, 

so BIS is not making any additional 

changes to the EAR or internal license 

review processes of the U.S. 

Government to create a greater role for 

the applicant in the interagency review 

process for License Exception STA 

eligibility requests. 

One commenter requested BIS allow 

an extension of the review period for 

STA eligibility if agreed to by the 

applicant. This commenter suggested 

this could be implemented in § 750.4(f) 

(Procedures for processing license 

applications) by allowing for an 

additional review period of 10 calendar 

days, with an extension if agreed to by 

the applicant. BIS is not accepting this 

change because the License Exception 

STA eligibility requests and the license 

applications requesting an authorization 

for an export, reexport or in-country 

transfer are no longer going to be linked 

in this final rule, so the concern with 

the License Exception STA timeline 

interfering with the timeline for the 

review of the license application is no 

longer an issue. 

One commenter thought it would be 

useful to provide further clarity on the 

proposed ‘‘STA eligibility’’ review 

process, and its precise relationship to 

the ACEP licensing process. If it is the 

intent to review STA eligibility requests 

in tandem with the ACEP licensing 

review process, this commenter is 

concerned whether such a review would 

provide adequate administrative due 

process. As noted above, the License 

Exception STA eligibility requests will 

not be reviewed in tandem with the 

license application review process, so 

this concern is already addressed. In 

addition, as described in § 740.20(g), in 

the event that STA eligibility is denied, 

exporters are able to seek 

reconsideration of the denial and are 

encouraged to provide any additional 

information supporting their request. 

Further, a denial of STA eligibility does 

not preclude an exporter from applying 

for a license for the same export. 

One commenter requested that BIS 

mandate applicants who receive a 

notification from BIS authorizing the 

use of License Exception STA for 

specific end items to share such 

determinations with other parties. BIS 

does not accept this change. Applicants 

who receive an approval may share that 

notification, but BIS does not believe 

that mandating that party to share the 

notification received from BIS is 

warranted. BIS will communicate such 

determinations based on an amendment 

to the EAR as described in 

§ 740.20(g)(5)(i). BIS believes this 

combination of a voluntary sharing 

approach followed by a regulatory 

change to inform the public is the best 

approach. 

2. License Application for a ‘‘600 

Series’’ Item That Is Equivalent to a 

Transaction Previously Approved Under 

a State License or Other Approval 

This final rule is making changes to 

Supplements Nos. 1 (Item Appendix, 

and BIS–748P–B: End-User Appendix; 

Multipurpose Application Instructions) 

and 2 (Unique Application and 

Submission Requirements) to part 748 

to allow for the consideration of 

previous State licenses or other 

approvals that are equivalent to a new 

license application for a ‘‘600 series’’ 

item. These changes are being made to 

address a comment regarding how 

previous ITAR licenses or other 

approvals could be considered as part of 

the EAR license review process. Other 

changes included in this final rule 

address the use of ITAR licenses and 

other approvals that remain valid (see 

Section III.C above). 

One comment requested BIS create an 

ID code in SNAP–R to automatically 

convert ITAR agreements to BIS 

licenses. Another commenter suggested 

implementing an amendment capability 

as it relates to licenses. BIS does not 

accept the suggested change to create an 

ID code in SNAP–R that would allow 

applicants for ‘‘600 series’’ items to 

automatically transfer previous ITAR 

agreements (e.g., MLA or TAA) to a BIS 

license because of technical limitations 

in the SNAP–R and the importance of 

reviewing these new proposed exports, 

reexports, and transfers (in-country) that 

will be made under the EAR licenses 

being applied for at the time of the new 

applications. 

However, BIS does agree that an 

export, reexport or in-country transfer 

previously authorized under an ITAR 

license or other approval (e.g., MLA or 

TAA) may be relevant to the review of 

a subsequent EAR license application if 

the transaction in question is equivalent 

to the transaction previously authorized. 

Therefore, BIS is making a change that 

was not proposed previously in the July 

15 (framework) rule to revise the license 

application process to provide guidance 

to applicants on how to have a previous 

State license or other authority be 

considered as part of the license review 

process for a ‘‘600 series’’ item. 

To implement this change, BIS is 

revising the instruction in Supplement 

No. 1 to part 748 (BIS–748P, BIS–748P– 

A: Item Appendix, and BIS–748P–B: 

End-User Appendix; Multipurpose 

Application Instructions) to create a 

process in SNAP–R for applicants to 

input a State license or other approval 

number in Block 24. The ITAR license 

or other approval number will alert BIS 

and the other U.S. Government agencies 

reviewing a particular ‘‘600 series’’ 

application that the new application is 

equivalent to a previous State license or 

other approval. 

Only those license applications where 

the particulars (e.g., the description of 

the item, the purchaser, ultimate 

consignee and end-user(s)) are the same 

in both the EAR license application and 

the previously issued ITAR 

authorization, will receive full 

consideration under this paragraph. In 

some instances, review under this 

paragraph may result in a quicker 

processing time. The State license 

number or other identifier, such as a 

MLA or TAA identifier, must be 

included in Block 24 of the BIS license 

application, as noted above. Lastly, this 

final rule is adding a Note to paragraph 

(x) to clarify license applications 

submitted under paragraph (x) will still 

be reviewed on their own merits and in 

accordance with license review 

procedures and timelines identified in 

part 750. 

BIS agrees with the second 

commenter who suggested an 

amendment capability for licenses 

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would improve the efficiency of the 

EAR licensing process as the current 

EAR does not allow for amendments to 

licenses. Amendments to licenses are 

addressed with the submission of a 

replacement license when a change 

needs to be made to a previously 

authorized license for a change not 

described in § 750.7(c) in accordance 

with the instructions contained in 

Supplement No. 1 to part 748 of the 

EAR, Block 11. At this time, BIS is not 

able to implement a process in this final 

rule to allow for amending of existing 

EAR licenses. However, BIS intends to 

reconsider this idea once the single 

licensing form is developed and the 

export control IT system has greater 

flexibility to address such changes, 

including creating an efficient process 

for allowing license holders to submit 

such requests for changes to a license 

and allowing for identification and 

efficient tracking of such changes. These 

types of improvements in the IT system 

will better ensure relevant U.S. 

Government enforcement officials can 

identify such approved changes to 

verify compliance with approved 

amended licenses. 

XVII. Part 750—Application 

Processing, Issuance, and Denial 

In the June 21 (transition) rule, BIS 

proposed revising § 750.4 to address 

Congressional notification for the export 

of ‘‘600 Series Major Defense 

Equipment’’ and revising § 750.7 to 

extend the validity period of BIS 

licenses and permit shipment to and 

among multiple end users. These 

proposals, public comments thereto, 

and final decisions are discussed in 

more detail below. 

A. Calculating Processing Times 

As proposed in the June 21 

(transition) rule, this rule amends 

§ 750.4(b) to add the congressional 

notification process associated with 

requests to export ‘‘600 Series Major 

Defense Equipment’’ to the list of 

actions not included in license 

application processing time 

calculations. 

B. Shipment to Approved End Users 

BIS licenses generally designate one 

ultimate consignee and may have many 

designated end users. DDTC 

authorizations may designate multiple 

foreign end users. The June 21 

(transition) rule proposed to revise 

§ 750.7(c) explicitly to allow direct 

shipments to approved end users on an 

export or reexport license if those end 

users are listed by name and location on 

such license. BIS received no comments 

that directly referred to this proposed 

revision, but one commenter expressed 

concern that EAR licenses would afford 

less flexibility than ITAR agreements, 

which may allow shipments among 

approved end users outside the United 

States in addition to direct shipment to 

approved end users from the United 

States. BIS acknowledges that this is a 

valid concern; therefore, this rule 

amends proposed § 750.7(c)(1)(ix) by 

allowing direct export, reexport and 

transfer (in-country) to and among 

approved end users provided they are 

listed by name and location on such 

license and that the license does not 

contain any conditions that cannot be 

complied with by the end user, and by 

removing a proposed restriction on 

exports and reexports to unlisted end 

users. This rule also makes conforming 

changes to § 758.5. 

C. Extended Validity 

Current ITAR licenses are generally 

valid for four years. Agreements under 

the ITAR may be valid as long as ten 

years. Prior to the effective date of this 

rule, BIS licenses were generally valid 

for two years. In order to harmonize the 

EAR with the ITAR, the June 21 

(transition) rule proposed to revise 

§ 750.7(g) to extend the validity period 

of BIS licenses issued hereafter from 

two years to four years, with some 

exceptions, unless otherwise specified 

on the license. 

Three commenters expressed support 

for this extension, and none expressed 

opposition to it. However, one 

commenter suggested a default ten-year 

validity period for replacing an ITAR 

agreement. BIS does not accept the 

suggested revision, but BIS notes that 

exporters may request an extended 

validity period pursuant to § 750.7(g)(1) 

beyond four years. Such requests will be 

reviewed on a case-by-case basis. 

Grounds for requesting extension would 

include having had agreements on 

similar matters previously approved by 

the Department of State for a longer 

period. BIS believes that setting up a 

new process for a default validity period 

would restrict the flexibility of the 

reviewing agencies without significantly 

lessening the burden on the applicant, 

as the same information would have to 

be supplied under a default process as 

will be required for a license application 

and request for extended validity. 

D. Specificity on Application 

Three commenters asserted that BIS’s 

proposed licensing process is more 

burdensome than DDTC licensing 

because the ITAR allows identifying 

general categories rather than parsing 

out each part covered by an application. 

BIS believes that most general categories 

of items transitioning from the USML 

will fall into general categories in the 

EAR as well, such as the .x paragraphs 

of the ‘‘600 series’’ ECCNs. Therefore, 

the burden should be comparable. For 

example, if a collection of parts 

specially designed for a military aircraft 

were formerly controlled under USML 

Category VIII(h) and were not identified 

in the revised USML Category VIII(h), 

then they would be controlled under 

ECCN 9A610.x. BIS does not and would 

not generally expect more detail on a 

BIS license application in this regard 

than what DDTC would generally expect 

on one of its license applications. 

XVIII. Part 756—Appeals 

This final rule adopts the position 

described in the July 15 (framework) 

rule that STA eligibility decisions 

cannot be appealed through part 756. 

BIS is maintaining this position for the 

reasons set forth in that rule, i.e., that 

the decision to grant STA eligibility is 

a foreign policy determination and 

because consensus is required among 

the considering agencies to do so. In 

addition, exporters should keep in mind 

that a denial of STA eligibility does not 

preclude the exporter from submitting a 

license application for the same 

transaction. This rule amends the 

regulatory text proposed in the July 15 

(framework) rule to remove ambiguity 

about its scope. 

XIX. Part 758—Export Clearance 

Requirements 

A. AES Filing Regardless of Value, 

Except for .y Items 

The June 21 (transition) rule proposed 

to revise § 758.1 to require that 

information on all exports of ‘‘600 

series’’ items be filed in AES regardless 

of value or destination. Six commenters 

opposed this requirement. They cited 

difficulties in separating ‘‘600 series’’ 

items from other CCL items in their 

internal systems, and stated that 

applying different clearance 

requirements for items eligible for the 

same license exceptions was confusing. 

BIS did not accept these suggestions. 

Due to the nature of ‘‘600 series’’ items 

as items specially designed for military 

applications or end items, the U.S. 

Government needs to retain a degree of 

visibility into the movement of these 

items. This final rule adopts the 

amendment to § 758.1 from the 

proposed rule, except with respect to .y 

items, which is discussed further below. 

Three commenters requested that .y 

items not be subject to as stringent 

requirements. BIS agrees, given the 

lesser military significance of .y items. 

To lessen the AES requirements on .y 

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items, BIS has removed .y items from 

the mandate to file in AES for all 

exports. Thus, the AES filing 

requirement for .y items would be the 

same for all other AT-only controlled 

items on the CCL. 

The June 21 (transition) rule proposed 

to revise § 758.1 to require AES filing for 

all exports under License Exception 

Strategic Trade Authorization (STA), 

regardless of value, to enable the U.S. 

Government to obtain information about 

low-value shipments of these items. 

That rule also proposed to revise § 758.2 

to preclude the option of post-departure 

filing for exports of ‘‘600 series’’ items 

because this option is not permitted for 

ITAR-controlled exports now, and the 

rule proposed removing the option of 

post-departure filing for License 

Exception STA and Authorization VEU 

because the nature of these 

authorizations requires pre-departure 

filing of this information to ensure 

compliance with their terms and 

conditions. These proposals are adopted 

in this final rule. 

B. Furnishing of ECCNs to Consignees 

Section 758.6 requires that exports of 

items on the CCL be accompanied by a 

Destination Control Statement (DCS) 

identifying the items as subject to the 

EAR. Given the nature of the ‘‘600 

series’’ items and requirements related 

to them, additional information 

identifying ‘‘600 series’’ items is 

necessary. The June 21 (transition) rule 

proposed to revise § 758.6 to require a 

more specific DCS for ‘‘600 series’’ 

items, which would require exporters to 

identify in the text of the DCS the 

ECCNs of all ‘‘600 series’’ items being 

exported to ensure that consignees are 

aware that they are participating in a 

transaction that includes such items. 

BIS received comments on this 

proposal requesting that BIS not change 

the DCS, as it is pre-printed on certain 

export control documents, so tailoring it 

to different shipments is burdensome. 

Taking these views into account, but in 

continued recognition of the need to 

identify ‘‘600 series’’ items to 

consignees and national authorities, BIS 

has revised § 758.6 to require that the 

ECCN for each ‘‘600 series’’ item being 

shipped be provided on the same 

documents on which the DCS is 

required, but not in the text of the DCS 

itself. This rule requires that the ECCN 

for each ‘‘600 series’’ item must be 

entered on the invoice and on the bill 

of lading, air waybill, or another export 

control document that accompanies the 

shipment from its point of origin in the 

United States to the ultimate consignee 

or end user abroad. This final rule does 

not change the text of the DCS 

requirement; it merely adds a new 

‘‘[g]eneral requirement’’ heading to the 

previously existing requirement. 

BIS received one comment that 

requested that BIS require the ECCN for 

all items, not just ‘‘600 series’’ items, in 

the DCS to assist foreign parties in 

classification. BIS recognizes the value 

to foreign parties of requiring exporters 

to furnish the ECCN for all items 

shipped. However, this rule’s purpose is 

to revise the EAR to allow the transition 

of the ‘‘600 series’’ from the ITAR to the 

EAR. Therefore, BIS does not accept this 

recommendation as it is outside the 

scope of this final rule. BIS does, 

however, urge exporters to advise 

foreign parties to the transaction of the 

ECCNs of all exported items. 

BIS received eight comments 

requesting that it not require the 

inclusion of the ECCN for ‘‘600 series’’ 

items in the DCS. These commenters 

argued that there would be substantial 

burden in revising their information 

technology (IT) and compliance systems 

to insert the ECCN into the DCS and 

further burden in maintaining a separate 

DCS for ‘‘600 series’’ items. Consistent 

with the discussion above, BIS agrees 

with commenters that the burden of 

including ECCNs in the DCS paragraph 

outweighs the value of notifying 

national authorities, consignees, and 

other parties of ECCNs via that 

statement. Therefore, BIS has 

determined that the ECCN must be 

included on the export control 

documents in a manner that will allow 

national authorities, consignees, and 

others who review those documents to 

quickly and easily determine the ECCN 

of each ‘‘600 series’’ item in a shipment, 

but will not require changes to the DCS 

paragraph. This will alert those 

interested parties to the export control 

classification of the ‘‘600 series’’ items 

and facilitate their determination of 

what controls are applicable to the 

particular ‘‘600 series’’ items. Allowing 

exporters flexibility in the placement of 

the ECCNs on the documents will allow 

each exporter to minimize the 

regulatory burden by adopting practices 

that fit most easily with its systems 

while helping to protect U.S. national 

security interests. 

Two commenters noted that the ECCN 

is already included in most export 

control documents, so inclusion in the 

DCS was unnecessary. BIS accepts this 

recommendation to the extent that it 

suggested that the ECCN requirement be 

removed from the DCS paragraph and 

applied to ‘‘export control documents’’ 

more generally and notes that exporters 

will have flexibility as to how to include 

the ECCN on ‘‘export control 

documents.’’ This flexibility should 

minimize the impact of this requirement 

for those exporters that already include 

the ECCN on their export control 

documents. 

Five commenters suggested that BIS 

substitute written notification to 

consignees of 600-series status as a 

condition of license exception use. BIS 

does not accept this recommendation. 

License Exception STA already requires 

written notification of the ECCN as a 

condition of use, and this requirement 

will continue to apply with the addition 

of the ‘‘600 series’’ items to the CCL. 

Inclusion of the ECCN on the export 

control documents is desirable because 

it provides notice of the ECCN to parties 

in addition to the Ultimate Consignee, 

including freight forwarders and 

national authorities. It also assists U.S. 

Customs and Border Protection agents 

with an opportunity to conduct 

compliance checks to ensure that the 

information on the export control 

documents matches the electronic 

export information in AES. 

One commenter suggested requiring 

the ECCN in the business agreements, 

such as contracts, that the parties enter 

into in connection with an export 

transaction. BIS does not accept this 

suggestion. While this may represent a 

good compliance practice, BIS does not 

deem it appropriate to dictate what 

terms must be included in the parties’ 

commercial agreements. BIS does not 

generally see the agreements, and they 

do not travel with the items during 

shipment. As noted above, several of the 

goals served by the inclusion of the 

ECCN on the ‘‘export control 

documents’’ are served by the fact that 

the documents travel with the items. 

One commenter stated that including 

the ECCN in the DCS would not raise 

awareness by foreign parties of the need 

for compliance with US export controls. 

BIS does not agree with this comment. 

Including the ECCN on the ‘‘export 

control documents’’ will increase the 

ability of foreign parties and national 

authorities to determine the relevant 

export controls. Additionally, requiring 

exporters and reexporters provide the 

ECCN is intended to improve 

compliance by ensuring that recipients 

of the items have a basis for determining 

license requirements. 

C. Removal of Obsolete References in 

Revised Text 

In part 758, this rule removes 

references in revised text to the 

Shipper’s Export Declaration or SED, 

because this form no longer exists. 

XX. Part 762—Recordkeeping 

The July 15 (framework) rule and the 

June 21 (transition) rule both proposed 

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revising § 762.2 to reference new 

recordkeeping requirements. The July 

15 (framework) rule proposed to add 

references to § 743.4, for Conventional 

Arms Reporting, and § 740.20(g), for 

License Exception STA eligibility 

requests for ‘‘600 series’’ end items. 

Descriptions of the underlying 

requirements are found in Sections 

XIII.A and XVI.B.1 above, respectively. 

As described in Section XI.F above, the 

June 21 (transition) rule proposed to add 

a requirement to § 740.20, note to 

paragraph (c)(1), that parties abroad 

must have been identified on a license 

or other approval issued by either BIS 

or DDTC prior to receiving ‘‘600 series’’ 

items under License Exception STA; 

this rule adds paragraph (b)(51) to 

conform to that requirement. The June 

21 (transition) rule also proposed to add 

references to § 740.11(b)(2)(iii) and (iv) 

(as described in Section XI.D of this 

rule), for exports made for or on behalf 

of a department or agency of the U.S. 

Government or at the direction of the 

Department of Defense. This rule adopts 

the proposed revisions to four 

paragraphs in § 762.2 to reference the 

additional records to be maintained in 

§§ 743.4, 740.20(g), and 740.11(b)(2)(iii) 

and (iv) and adds a reference to the 

existing recordkeeping requirement in 

§ 740.9(a)(3), for temporary exports of 

technology. Lastly, the rule adds two 

new paragraphs to reference the 

‘‘specially designed’’ definition in 

§ 772.2 (described below in Section 

XXIII) and a note to paragraph (c)(1) of 

§ 740.20 of the EAR (described below in 

Section XXIV.C.5). 

BIS received two comments related to 

the recordkeeping references in 

response to the July 15 (framework) 

rule. One comment states that the 

addition of the reference to § 743.4, for 

Conventional Arms Reporting, is 

premature, because no items are 

currently subject to the reporting 

requirement. BIS does not accept this 

recommendation. This rule provides the 

framework for the ‘‘600 series’’ within 

the EAR. It creates a reporting 

requirement for items listed on the 

Wassenaar Arrangement Munitions List 

and the UN Register of Conventional 

Arms. Therefore, a reference to that 

reporting requirement in § 762.2 

(Records to be retained) is appropriate. 

One comment states that the 

government should not depend on the 

recipients of its responses to License 

Exception STA eligibility requests to 

maintain records of those responses. BIS 

notes that although responses are 

transmitted through SNAP–R, SNAP–R 

is not intended to be a recordkeeping 

archive. Therefore, BIS does not accept 

this recommendation, and this final rule 

will require that any person who 

submits a License Exception STA 

eligibility request to maintain records of 

such a request in accordance with the 

new provisions added to part 762. 

Lastly, as a result of proposals made 

in the June 19 (specially designed) rule, 

in this final rule, BIS is adding a new 

paragraph (b)(50) to § 762.2 as a 

conforming change to notify the public 

that if they rely on the paragraph (b)(4), 

(b)(5), or (b)(6) exclusions of the 

‘‘specially designed’’ definition that the 

documentation related to such release 

must be retained in accordance with 

part 762 (Recordkeeping) of the EAR. 

One public comment in response to the 

June 19 (specially designed) rule raised 

concern that the documentation 

requirements referenced in the note to 

paragraphs (b)(4) and (b)(5) could be 

overlooked and suggested BIS add a 

reference to § 762.2. BIS agreed with the 

commenter’s suggestion and is adding 

this change to the final rule, along with 

other changes to the recordkeeping 

requirements referenced above. As 

described in more detail below in 

Section XXIII.A, paragraph (b)(6) is a 

new ‘‘development’’ based exclusion 

that is being added to the definition of 

‘‘specially designed’’ in this final rule. 

Because the paragraph (b)(6) exclusion 

is also a ‘‘development’’ based exclusion 

similar to (b)(4) and (b)(5) that includes 

the same types of documentation 

requirements, BIS is also adding a 

reference to paragraph (b)(6) to § 762.2 

in this final rule. 

XXI. Part 764—Foreign-Produced 

Direct Products and Denial Orders 

Because of the expansion of the 

provisions at § 736.2(b)(3) to include 

‘‘600 series’’ items, the June 21 

(transition) rule proposed to remove the 

penultimate paragraph in Supplement 

No. 1 to part 764. That penultimate 

paragraph states that the standard denial 

order ‘‘does not prohibit any export, 

reexport, or other transaction subject to 

the EAR where the only items involved 

that are subject to the EAR are the 

foreign-produced direct product of U.S.- 

origin technology.’’ One commenter 

objected to removing this paragraph on 

the grounds that foreign parties may be 

unaware that their foreign-made items 

are subject to the EAR. BIS does not 

agree with the commenter’s concern. 

Under General Prohibition 4 of the EAR, 

§ 736.2(b)(4), a party is responsible for 

ensuring that its transactions involving 

a denied person do not violate the terms 

of the applicable denial order. BIS also 

notes that the current standard denial 

order includes foreign-made items 

containing above a de minimis level of 

U.S. content. In transactions involving a 

denied person, foreign parties thus 

already need to determine whether 

foreign-made items are subject to the 

EAR. This rule adopts the provision as 

it was proposed. 

XXII. Part 770—Interpretations 

The November 7 (aircraft) rule 

proposed to remove Interpretation 9 

from part 770. As discussed below, 

paragraph (b)(3) of the ‘‘specially 

designed’’ definition being revised in 

this final rule is intended to capture the 

scope of Section 17(c) of the Export 

Administration Act of 1979, as 

implemented in the note to USML 

Category VIII(h) and Interpretation 9 to 

part 770 of the EAR, and apply it to the 

remainder of the USML and CCL. This 

means that any part, component, 

accessory, or attachment that was 

specifically designed or modified for a 

military aircraft but that would not be 

controlled under USML Category VIII(h) 

as a result of the note to USML Category 

VIII, would not be controlled by ECCN 

9A610.x which controls such items if 

‘‘specially designed’’ for a military 

aircraft and not elsewhere enumerated. 

Therefore, Interpretation 9 is no longer 

needed in the EAR and is being 

removed in this final rule. 

This final rule is also removing 

Interpretation 10 from part 770. This 

revision was not previously proposed, 

but the interpretation’s description of 

differing Commerce and State 

jurisdiction is out of date and no longer 

accurate and conflicts with the 

structural changes adopted in this final 

rule. Therefore, the interpretation is 

removed as a conforming change. 

XXIII. Part 772—Definitions (Including 

Specially Designed) 

A. ‘‘Specially Designed’’ Definition 

In conjunction with the Department of 

State, BIS published a proposed 

definition of ‘‘specially designed’’ on 

June 19, 2012 (77 FR 36409). The 

definition proposed in that rule took 

into account public comments received 

in response to an earlier proposed 

definition in the July 15 (framework) 

rule, and would create, insofar as 

practicable, a common definition of 

‘‘specially designed’’ for use under the 

CCL and the USML. As seen in the July 

15 (framework) rule, the definition of 

‘‘specially designed’’ proposed in the 

June 19 (specially designed) rule 

adopted a catch and release approach 

because the agencies found that it was 

easier to describe what the term did not 

or should not include rather than what 

it does include. Thus, paragraph (a) of 

the definition proposed in the June 19 

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(specially designed) rule contained 

three broad bases for items to be 

‘‘specially designed’’—the catch. If an 

item were caught by at least one of the 

three bases in paragraph (a), then 

paragraph (b) contained five exceptions 

to that item’s being ‘‘specially 

designed’’—the release. 

The catch-and-release construct must 

be robust enough to capture all items 

that may warrant being controlled as 

‘‘specially designed.’’ In order to protect 

U.S. national security interests, the 

paragraph (a) catch must be broad in 

scope. If paragraph (a) overreaches in 

certain cases, that can be tolerated to 

some degree, but as much as possible 

paragraph (b) of the definition tries to 

release those ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ ‘‘attachments,’’ and 

‘‘software’’ that do not warrant being 

treated as ‘‘specially designed.’’ 

However, it is important for protecting 

U.S. national security interests that only 

those ‘‘parts,’’ ‘‘components, 

‘‘accessories,’’ ‘‘attachments,’’ and 

‘‘software’’ that the U.S. Government 

has determined in all cases do not 

warrant being controlled as ‘‘specially 

designed’’ are released under paragraph 

(b). BIS received 31 comments in 

response to the proposed definition of 

‘‘specially designed’’ contained in the 

June 19 rule. Most commenters felt the 

proposed definition in the June 19 rule 

was a significant improvement over the 

July 15 (framework) rule proposal, but 

many expressed concerns about 

complexity, ambiguity of some of the 

terms used, and treatment of items that 

have undergone minor modifications in 

form or fit (more specific description of 

these comments and BIS’s responses to 

them are addressed further herein). One 

commenter asserted that BIS should 

have prepared a regulatory flexibility 

analysis of the effect of the proposed 

definition instead of having Commerce’s 

Chief Counsel for Regulations certify 

that the change would not have a 

significant impact on a substantial 

number of small entities, but this 

assertion was not supported by any 

specific information on the economic 

impact of adopting the proposed 

definition. BIS continues to believe that 

defining the term ‘‘specially designed’’ 

in the EAR, rather than leaving it 

undefined outside the MTCR context, 

helps all businesses by reducing 

uncertainty about how to classify their 

items. Small and medium-sized 

exporters who may not have export 

counsel or the resources available to 

obtain such assistance are less likely to 

need assistance to comply with a 

defined term than an undefined term. In 

addition, some commenters argued that 

a ‘‘natural’’ definition for the term 

already exists and that establishing a 

regulatory definition that would apply 

to all uses of ‘‘specially designed’’ 

needlessly complicates a 

‘‘straightforward’’ and ‘‘easilyunderstood’’ term. From extensive 

reviews of license applications, 

discussions with BIS’s Technical 

Advisory Committee members, and the 

diverse comments received from the 

public, BIS has concluded that 

organizations within similar industries 

have been and are continuing to apply 

wide-ranging interpretations of 

‘‘specially designed.’’ Some 

organizations have obtained commodity 

jurisdiction (CJ) determinations from the 

Department of State for a specific item 

and have then extrapolated the 

determination to similar items across 

multiple product lines despite potential 

differences in fact patterns, while others 

have limited the scope of CJs from 

applying to other product lines. They 

have applied the lessons learned from 

such cases to their application of 

‘‘specially designed.’’ 

Some organizations have applied the 

Missile Technology Control Regime 

(MTCR) definition of ‘‘specially 

designed’’ to all of their items, while 

other organizations have limited the 

applicability of the MTCR definition to 

items controlled for MT reasons only. 

Still other organizations have 

interpreted the text of § 120.3(a)(ii) of 

the ITAR to mean that if an item has any 

performance equivalent to a noncontrolled item, even if some 

modification has been made that 

differentiates the item from a noncontrolled item, then the item at issue 

is not subject to the ITAR or, by 

implication, caught under the ‘‘specially 

designed’’ description of an ECCN. 

Some have made this interpretation 

despite the parenthetical in § 120.3(a)(ii) 

describing performance equivalent as 

‘‘defined by form, fit and function’’ 

(emphasis added). On the other hand, 

many organizations treat any item that 

has been slightly modified in fit or form 

for a controlled item as ‘‘specially 

designed,’’ even if the modifications 

made are insignificant. 

Two public comments even raised 

meeting minutes from a 1975 meeting of 

the Coordinating Committee on Export 

Controls (COCOM), which helps 

demonstrate the length of time for 

which the interpretation of ‘‘specially 

designed’’ has been an issue. These 

commenters referred to these 1975 

meeting minutes to support their 

position that an exclusive use based 

interpretation of ‘‘specially designed’’ is 

warranted. However, given COCOM 

ceased to exist on March 31, 1994, the 

minutes are not instructive for purposes 

of this final definition of ‘‘specially 

designed.’’ In addition, as identified in 

the June 19 (specially designed) rule, a 

single definition based on exclusive use 

would not be adequate to protect U.S. 

national security interests or to account 

for the variety of ways in which the 

term ‘‘specially designed’’ is used under 

the EAR. 

It is clear to BIS and other agencies 

involved in export controls that there is 

no ‘‘natural’’ definition or interpretation 

of ‘‘specially designed,’’ and that this 

has led to competitive disparities for 

similarly situated organizations. 

Consequently, a single regulatory 

definition of ‘‘specially designed’’ is 

warranted. A single regulatory 

definition is the only way in which to 

adequately address the various and 

inconsistent interpretations of the term 

that are discussed above and is the 

clearest path for protecting U.S. national 

security interests and ensuring the U.S. 

Government is meeting its multilateral 

regime commitments. The United States 

has national discretion to establish a 

definition that is consistent with 

multilateral regime commitments, and 

this definition meets that requirement. 

However, while finalizing a definition 

of ‘‘specially designed’’ with this rule, 

BIS and its interagency partners share 

the goal of reducing the use of 

‘‘specially designed’’ to describe 

controlled items and intend to work to 

do so through the multilateral regimes 

and through the Advanced Notice of 

Proposed Rulemaking published on 

June 19, 2012 (77 FR 36419) (‘‘June 19 

ANPRM’’), which is one of the first 

steps in that process. 

The public comment period closed on 

the June 19 ANPRM on September 17, 

2012. BIS received four comments in 

response to the ANPRM. Two public 

commenters noted the challenges and 

difficulties that would arise in trying to 

enumerate all of the components that 

would warrant control as ‘‘specially 

designed’’ components. Both 

commenters also noted that given the 

progress that has already been made in 

developing a suitable definition of 

‘‘specially designed’’ under ECR, it is 

preferable to continue with the track of 

adopting a single ‘‘specially designed’’ 

definition for use under the EAR and 

the ITAR, informed by the public 

comments received in response to the 

June 19 (specially designed) rule. 

The other two commenters were more 

optimistic about the feasibility of 

enumerating ‘‘specially designed’’ 

components. The third commenter in 

particular made a number of suggestions 

for how the ‘‘specially designed’’ 

components controlled in Category 5— 

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Part II (‘‘Information Security’’) could be 

enumerated, which BIS is still 

evaluating. The fourth commenter was 

quite supportive of the concept of 

enumerating ‘‘specially designed’’ 

components, but did not provide 

specific examples for how to describe 

the enumerated components, except to 

restate a comment that this commenter 

also submitted in response to the June 

19 (specially designed) rule, which was 

to use the term ‘‘required’’ in place of 

‘‘specially designed.’’ 

As noted above, BIS and its 

interagency partners will continue to 

evaluate these comments and, 

consistent with the goal of ECR of trying 

to make the control lists as ‘‘positive’’ as 

possible, will continue to evaluate 

where ‘‘components’’ can be 

enumerated on the CCL and the USML 

and, where possible, to enumerate such 

‘‘components.’’ However, the limited 

response to the June 19 ANPRM and the 

two commenters who specifically 

indicated the challenges and difficulties 

they perceived in relying on such an 

approach to enumerating ‘‘specially 

designed’’ ‘‘components’’ further 

reinforces BIS’s assessment regarding 

the need for the use of the term 

‘‘specially designed’’ in particular under 

the .x and .y paragraphs that will play 

such an important role in the ‘‘600 

series’’ being added to the CCL, in 

addition to the other uses of ‘‘specially 

designed’’ on the CCL outside of the 

‘‘600 series.’’ 

These comments also further reinforce 

BIS’s assessment that the ‘‘specially 

designed’’ definition included in this 

final rule, which was further refined 

based on the comments received in 

response to the June 19 (specially 

designed) rule, would make a significant 

step forward toward resolving this longstanding issue under U.S. export 

controls. BIS believes adopting this 

definition of ‘‘specially designed’’ is the 

most feasible approach to defining the 

controls for ‘‘specially designed’’ 

‘‘components’’ in the vast majority of 

cases on the CCL where ‘‘specially 

designed’’ is used as part of the control 

parameter. However, BIS will continue 

to evaluate the comments received in 

response to the June 19 ANPRM and 

where feasible develop proposals for 

enumerating or describing certain 

‘‘components’’ on the CCL. 

The Departments of Defense, State, 

Commerce, Homeland Security, and 

Justice reviewed all comments in 

preparing the ‘‘specially designed’’ 

definition for this final rule. BIS 

understands that this implementation 

will change, and possibly increase, the 

number of items previously treated as 

‘‘specially designed;’’ and thus 

controlled items. Adopting the 

definition in this rule is, however, 

necessary to eliminate the various and 

inconsistent interpretations, establish a 

level playing field for organizations, and 

appropriately reflect the national 

security and foreign policy concerns of 

the United States. In addition, the 

possible increase would likely be for 

those organizations noted above that 

were interpreting ‘‘specially designed’’ 

based on misperceptions of the 

perceived ‘‘natural’’ meaning of 

‘‘specially designed,’’ which likely were 

not consistent with U.S. law and policy 

in regards to how the U.S. Government 

has interpreted ‘‘specially designed.’’ In 

certain cases, the public may have relied 

on U.S. Government interpretations for 

what was not ‘‘specially designed’’ 

through the CJ or commodity 

classification automated tracking system 

(CCATS) processes and for these items 

determined not to be ‘‘specially 

designed,’’ the final definition includes 

changes to preserve those legacy 

determinations made through previous 

CJs and CCATS under certain 

limitations. A discussion of the 

comments and changes made to the June 

19 (specially designed) rule are 

addressed below. 

1. Introductory Text to the Definition of 

‘‘Specially Designed’’ 

The June 19 proposed definition 

included introductory text that outlined 

the sequential analysis that would be 

followed in evaluating the ‘‘specially 

designed’’ definition. Several 

commenters that supported the 

definition indicated the linear process 

outlined for reviewing the definition 

was helpful and an improvement. These 

commenters agreed the structure of the 

definition would lend itself to a 

decision tree process where the public 

could answer a series of yes/no 

questions that would ultimately result 

in a consistent interpretation regarding 

what is and what is not ‘‘specially 

designed.’’ Going off this theme, some 

commenters also suggested developing 

formal decision trees and other 

regulatory guidance to assist the public 

in understanding and applying the 

‘‘specially designed’’ definition. Other 

commenters suggested simplifying some 

of the introductory text because it was 

redundant with other portions of the 

definition. 

BIS addressed these comments by 

significantly simplifying (and thus 

expanding) the introductory text to the 

definition. The introductory text in the 

‘‘specially designed’’ definition in this 

final rule simply states that when 

applying this definition, follow the 

sequential analysis set forth in the 

definition. However, to address those 

commenters who thought additional 

guidance would be helpful, the 

introductory text will now include a 

cross reference to direct the public for 

additional guidance on the order of 

review of ‘‘specially designed,’’ 

including how the review of the term 

relates to the larger CCL in a new 

Supplement No. 4 to part 774— 

Commerce Control List Order of Review, 

that is also being implemented in this 

final rule. 

BIS created Supplement No. 4 to part 

774 to allow for more detail to be 

provided regarding the steps to be 

followed in applying the ‘‘specially 

designed’’ definition and also how and 

when the public should review the 

‘‘specially designed’’ definition in the 

larger review of the CCL. BIS added this 

guidance as a new supplement to part 

774 because other supplements, such as 

Supplements No. 2 and No. 3 also 

provide guidance on interpreting the 

CCL. BIS’s decision to add this new 

Supplement No. 4 also took into 

account the widespread use of 

‘‘specially designed’’ on the CCL and in 

the new ‘‘600 series’’ in deciding that 

additional guidance is warranted on the 

appropriate order of review. In addition 

to the new supplement, BIS is also 

developing outreach materials to be 

used on the BIS Web site and outreach 

seminars to further public 

understanding of the ‘‘specially 

designed’’ definition added to the EAR 

in this final rule, along with the larger 

order of review for the CCL. The 

‘‘specially designed’’ definition will 

play a key role in ECR. BIS and DDTC 

are committed to ensuring the public 

will have the necessary support and 

training materials available through the 

targeted outreach program BIS and State 

are developing to ensure the public is 

able to understand and use the new 

‘‘specially designed’’ definition 

effectively. 

2. Paragraph (a)—Identifying ‘‘Specially 

Designed’’ Items 

Under the ‘‘catch’’ provisions of the 

proposed June 19 definition, one must 

determine if, as a result of 

‘‘development’’ activities, an item meets 

the scope of any one of paragraphs 

(a)(1), (a)(2), or (a)(3). Under paragraph 

(a)(1), an item is caught if, as a result of 

‘‘development,’’ it has properties 

‘‘peculiarly responsible for’’ achieving 

or exceeding the performance levels, 

characteristics, or functions described in 

the relevant ECCN or USML paragraph. 

Paragraph (a)(1) would apply to all 

commodities, including materials, as 

well as software; the paragraph does 

not, however, generally apply to 

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technology. Controlled technology is 

generally identified by the alreadydefined term ‘‘required’’ and the 

General Technology Note in 

Supplement No. 2 to part 774 rather 

than the term ‘‘specially designed.’’ The 

scope of items controlled under 

paragraphs (a)(2) and (a)(3) would be 

more limited, but the scope of control 

arguably would be broader than 

paragraph (a)(1). Under paragraph (a)(2), 

a ‘‘part’’ or ‘‘component’’ would be 

caught if, as a result of ‘‘development,’’ 

it is necessary for an enumerated or 

referenced commodity or defense article 

to function as designed. Under 

paragraph (a)(3), an accessory or 

attachment would be caught if, as a 

result of ‘‘development,’’ it would be 

used with an enumerated or referenced 

commodity or defense article to enhance 

its usefulness or effectiveness. 

In response to paragraph (a), 

commenters were generally supportive 

of the ‘‘peculiarly responsible’’ standard 

in paragraph (a)(1), and some 

commenters advocated using this same 

standard in paragraph (a)(2). Other 

commenters recommended inserting 

text that paragraph (a)(2) only applies to 

‘‘application specific’’ ‘‘parts’’ and 

‘‘components’’ or those having the 

performance levels that are the bases for 

control. Also, one commenter supported 

the MTCR’s ‘‘exclusive use’’ standard to 

be used for all ‘‘specially designed’’ 

references, regardless of whether MT 

controls are implicated. Another 

commenter recommended creating an 

AT control only for components subject 

to a catch-all control. BIS does not 

accept these recommendations as they 

are inadequate to protect U.S. national 

security interests or to account for the 

variety of ways in which the term 

‘‘specially designed’’ is used under the 

EAR. 

For purposes of determining when a 

‘‘part’’ or ‘‘component’’ is ‘‘specially 

designed,’’ an item may be controlled 

for reasons other than the level of 

technical sophistication or contribution 

to enabling a component or end item to 

reach the parameters identified in an 

ECCN or USML paragraph. For example, 

a particular ‘‘part’’ may not be 

considered sophisticated in and of itself, 

but it may be essential to the repair or 

continued operation of a ‘‘component’’ 

or ‘‘end item’’ that is technically 

sophisticated or described on the CCL or 

USML. BIS believes that it is necessary 

to extend the ‘‘catch’’ of the ‘‘specially 

designed’’ definition to reach these less 

sophisticated ‘‘parts’’ or ‘‘components’’ 

that warrant control for national 

security or foreign policy reasons. In 

addition, BIS believes that a peculiarly 

responsible standard solely used to 

determine what ‘‘parts’’ and 

‘‘components’’ are ‘‘caught’’ under 

‘‘specially designed’’ would present too 

much room for subjectivity in terms of 

when a ‘‘part’’ or ‘‘component’’ would 

meet the peculiarly responsible 

standard. 

BIS needs a definition that is clear 

and objective such that if ten people 

were provided with the same set of 

facts, they would consistently make the 

same determination whether a ‘‘part’’ or 

‘‘component’’ was ‘‘caught’’ under 

‘‘specially designed.’’ The peculiarly 

responsible standard is a good indicator 

for what is special and warrants control 

under ‘‘specially designed’’ which is 

why the (a)(1) criterion is included in 

this final rule. However, the peculiarly 

responsible standard should not be the 

sole criterion for what ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments’’ or ‘‘software’’ would be 

‘‘caught’’ under ‘‘specially designed.’’ 

Because of its utility in identifying 

‘‘specially designed’’ items, in particular 

for end items and material, BIS has 

maintained the ‘‘peculiarly responsible’’ 

standard in proposed paragraph (a)(1) 

and only made minor conforming edits 

to (a)(1) based on other changes 

described further below. 

Additional commenters requested 

clarification, with respect to paragraph 

(a)(2), on interpreting the terms 

‘‘necessary’’ and ‘‘to function as 

designed.’’ For example, commenters 

questioned whether anti-lock brake 

systems or airbag systems modified for 

vehicles in USML Category VII would 

be necessary for the vehicles to function 

as designed. Similarly, some 

commenters presented concerns for 

determining when an accessory or 

attachment enhances the usefulness or 

effectiveness under paragraph (a)(3), 

while other commenters stated that the 

text in (a)(3) would simply repeat the 

definition of ‘‘accessory’’ and 

‘‘attachment.’’ To address these 

concerns, one commenter recommended 

that paragraph (a)(3) be removed and 

that paragraph (a)(2) be revised to read 

as follows: ‘‘is a ‘part,’ ‘component,’ 

‘accessory,’ or ‘attachment’ used in or 

with commodities enumerated on the 

CCL or the USML.’’ 

BIS agrees that the wording proposed 

in paragraph (a)(2) presents ambiguity 

for fact patterns like the two items 

described above. BIS also concurs that 

paragraph (a)(3) unnecessarily repeats 

text from already-defined terms. 

Consequently, with this final rule, BIS 

is eliminating paragraph (a)(3) and 

moving ‘‘accessories’’ and 

‘‘attachments’’ to a revised paragraph 

(a)(2), that catches ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments’’ or ‘‘software’’ ‘‘for use in 

or with a commodity or defense article 

enumerated or otherwise described on 

the CCL or the USML.’’ BIS believes that 

this change enhances clarity and 

furthers the intent of paragraph (a)(2), 

and the proposed (but now eliminated) 

paragraph (a)(3), to be a broad ‘‘catch.’’ 

This simplified approach will catch any 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment’’ or ‘‘software’’ that is in 

any way for use in or with (regardless 

of the perceived insignificance) a 

commodity or defense article 

enumerated or otherwise described on 

the CCL or USML. While this change 

will result in more ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments’’ and ‘‘software’’ being 

caught under paragraph (a)(2) than the 

June 19 proposal, the release provisions 

in paragraph (b) will likely be 

applicable for many of the ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments’’ and ‘‘software’’ that 

would not otherwise have been 

previously caught by the draft paragraph 

(a) in the June 19 proposal. 

BIS is also amending paragraph (a)(2) 

to include ‘‘software’’ with ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ in this final rule. One 

commenter expressed concerns that 

‘‘software’’ would be caught under 

paragraph (a) but not released under 

paragraph (b), which could potentially 

catch more ‘‘software’’ than intended. 

BIS shares this concern, and is 

including ‘‘software’’ within the release 

provisions of paragraph (b) in this final 

rule. 

One commenter contended it was 

unfair that if its ‘‘part’’ or ‘‘component’’ 

was excluded under paragraph (a)(1) for 

the ‘‘part’’ or ‘‘component’’ to then 

potentially get caught under ‘‘specially 

designed’’ on the basis of the broader 

paragraph (a)(2). This comment misses 

the point that both the catch provisions 

of paragraph (a) and the release portions 

of paragraph (b) are intended to work 

together to identify those items that 

warrant being ‘‘specially designed.’’ 

Viewing one paragraph of the definition 

in isolation misses the larger objectives 

of the definition, which is to ensure that 

the appropriate items are classified as 

‘‘specially designed’’ based on 

answering a series of simple yes/no 

questions. Paragraph (b) discussed 

below is structured in a similar way as 

paragraph (a) where the public should 

review each paragraph of (b) to 

determine whether a particular ‘‘part’’ 

‘‘component,’’ ‘‘accessory’’ or 

‘‘attachment’’ or ‘‘software’’ is 

‘‘specially designed.’’ One distinction 

between paragraph (a) and (b) is that 

once exporters determined their ‘‘part,’’ 

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22686 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is excluded 

on the basis of any paragraph under (b), 

no further review of the definition of 

‘‘specially designed’’ will be necessary. 

3. Changes to Note to Paragraph (a)(1) 

Several commenters indicated the 

Note to paragraph (a)(1) was a very good 

addition to the ‘‘specially designed’’ 

definition in the June 19 (specially 

designed) rule. However, BIS decided 

based on some of the comments 

received that appeared to 

misunderstand the relationship between 

paragraphs (a)(1) and (a)(2) that 

providing an example of an end item or 

material in the Note to paragraph (a)(1) 

(demonstrating the applicability and 

inapplicability of the peculiarly 

responsible standard) would be more 

helpful than a component example. 

Therefore, BIS is replacing the 

component example of ECCN 2B207.a 

with an end item example based on 

ECCN 1A007. The intent of the Note to 

paragraph (a)(1) is not changing. This 

final rule is only adding the ECCN 

1A007 example because it better reflects 

the items that will most likely be 

captured under the (a)(1) criteria and 

helps to avoid the confusion certain 

commenters were having in 

understanding the relationship between 

paragraphs (a)(1) and (a)(2). Specifically, 

the Note intends to make clear that 

‘‘parts’’ or ‘‘components’’ not meeting 

the ‘‘peculiarly responsible’’ standard of 

paragraph (a)(1) may still be caught 

under the broader controls of paragraph 

(a)(2). 

4. Paragraph (b)—Excluding Items 

Caught Under Paragraph (a) From 

‘‘Specially Designed’’ 

The June 19 definition of ‘‘specially 

designed’’ proposed five exclusions 

under paragraph (b) for ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ that would otherwise be 

caught as ‘‘specially designed’’ under 

paragraph (a). The release portion of the 

definition plays an important role in the 

definition and as noted above works 

together with paragraph (a) to refine the 

set of ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories’’ and attachments’’ that get 

‘‘caught’’ under ‘‘specially designed.’’ 

As discussed above, BIS is expanding 

paragraph (b) to allow software to be 

eligible for these exclusions with the 

exception of paragraph (b)(2) which is 

specific to certain ‘‘parts’’ and minor 

components specified in that paragraph. 

Below is a description of the proposed 

paragraph (b) exclusions, the comments 

received, and the changes made to the 

exclusions in this final rule. 

5. Paragraph (b)(1)—Resolving Potential 

Jurisdictional Conflicts and Determining 

Order of Review 

Under the June 19 proposal, 

paragraph (b)(1) would clarify that a 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ enumerated on the USML 

is excluded from the definition of 

‘‘specially designed’’ within any ECCN 

on the CCL. In response to proposed 

paragraph (b)(1), one commenter stated 

the provision avoids jurisdictional 

disagreements, while another 

commenter stated that the provision was 

redundant and thus added confusion. 

An additional commenter expressed 

concerns of a conflict or overlap 

between proposed Category VIII(h)(1) 

and proposed ECCN 9A610.y. BIS does 

not agree that there is a conflict or 

overlap between proposed Category 

VIII(h)(1) and proposed ECCN 9A610.y. 

BIS agrees that proposed paragraph 

(b)(1) is redundant, but it was included 

to remind readers that any ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ or 

‘‘attachment’’ enumerated on the USML 

is subject to the ITAR. No further review 

of the catch-all provisions (or other 

provisions) of the CCL or the EAR 

definition of ‘‘specially designed’’ is 

necessary. To streamline the definition 

of ‘‘specially designed,’’ BIS is removing 

the text in paragraph (b)(1) proposed in 

the June 19 (specially designed) rule 

and addressing jurisdictional issues and 

the order of review in the new 

Supplement No. 4 to part 774, which 

was discussed above. 

Several commenters requested 

guidance regarding how items subject to 

past CJs or CCATS determinations 

would be treated under the ‘‘specially 

designed’’ definition. Specifically, 

whether a CJ determination ruled that 

an item was not subject to the ITAR or 

a CCATS where an item that was subject 

to the EAR was not classified as a 

‘‘specially designed’’ item would be 

treated for purposes of the ‘‘specially 

designed’’ definition. These commenters 

suggested a grandfathering provision be 

added to address such past U.S. 

Government CJ and CCATS 

determinations. 

In addition to addressing these legacy 

CJs and CCATS, some commenters 

suggested that although the paragraph 

(b) exclusions would exclude many of 

the types of items that should be 

excluded from ‘‘specially designed’’ 

ultimately either a broadening of some 

of the paragraph (b) exclusions was 

needed or, alternatively, some type of 

U.S. Government review mechanism 

needed to be created to allow for some 

discretion in terms of perceived 

insignificant items that may get 

‘‘caught’’ under paragraph (a) of the 

‘‘specially designed’’ definition, but not 

warrant control as a ‘‘specially 

designed’’ item. As discussed below, 

BIS is making additional changes to 

broaden the scope of some of the 

paragraph (b) exclusions and is making 

certain changes in this final rule to 

improve the clarity of these exclusions 

based on the comments received. 

This final rule is also revising the 

definition proposed in the June 19 

(specially designed) rule by adding a 

new paragraph (b)(1) to address the 

treatment of past CJ and CCATS 

determinations. In the case of a CJ 

determination where an item was 

determined to not be subject to the ITAR 

and the CJ determination indicated a 

classification on the CCL other than as 

a ‘‘specially designed’’ item, such items 

would remain under that classification 

and not be ‘‘caught’’ under the 

‘‘specially designed’’ definition. 

Paragraph (b)(1) would release such 

‘‘parts,’’ ‘‘components,’’ accessories,’’ 

‘‘attachments,’’ and ‘‘software.’’ This 

grandfathering provision is added 

because in these fact-specific cases the 

U.S. Government has already reviewed 

the specialness of a particular ‘‘part,’’ 

‘‘component,’’ accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ and made a 

determination that such an item is not 

‘‘specially designed.’’ Therefore, such 

items do not warrant being ‘‘caught’’ 

under the ‘‘specially designed’’ 

definition and can be released under 

paragraph (b)(1) that is being added in 

this final rule. Under the November 7 

(aircraft) rule, BIS proposed a similar 

grandfathering provision under the .y.99 

concept for items determined to be 

EAR99 in past CJs or CCATS 

determinations and for items classified 

under other ECCNs. Such classifications 

would be grandfathered in. After further 

review of the public comments, BIS has 

decided a better and simpler approach 

is to address issues related to past CJ 

and CCATS determinations in the 

definition of ‘‘specially designed’’ itself 

under the new paragraph (b)(1). 

The paragraph (b)(1) exclusion 

grandfathering is based on past CJ 

determinations that indicated that the 

classification of the ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ on the CCL 

was in a ECCN paragraph that does not 

use ‘‘specially designed.’’ BIS is aware 

that in certain cases a CJ may have been 

issued that did not include a 

recommendation regarding the 

appropriate CCL classification, but a 

subsequent CCATS determination 

provided the classification. In such 

cases, a resubmission of the CCATS may 

be made under the new process 

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identified in § 748.3(e), which is also 

included in this final rule, as was 

discussed above (see Section XVI.A.). 

Provided there is a consensus 

interagency agreement with the original 

CCATS determination that such an item 

is not ‘‘specially designed,’’ such an 

item would not be caught under 

‘‘specially designed’’ and would be 

released under the new paragraph (b)(1) 

exclusion added in this final rule. The 

grandfather requests made pursuant to 

§ 748.3(e) should include the original 

CCATS number, as described above. 

The new paragraph (b)(1) exclusion is 

also forward looking. Paragraph (b)(1) 

provides a U.S. Government review 

mechanism for those ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ or ‘‘software’’ where a 

person believes such a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is so 

insignificant or minor that it should not 

be considered ‘‘specially designed.’’ 

This new paragraph (b)(1) acknowledges 

that there are additional ‘‘parts,’’ 

‘‘components,’’ accessories,’’ 

‘‘attachments,’’ or ‘‘software,’’ that may 

warrant also being released from 

‘‘specially designed’’ because of their 

perceived insignificance to the 

functioning of the item, but in order to 

protect U.S. national security interests, 

the U.S. Government, through a 

consensus determination of the 

Departments of Commerce, State and 

Defense, may make such 

determinations, either through the CJ 

process or the new CCATS interagency 

process outlined in § 748.3(e). The new 

paragraph (b)(1) is not a new idea. It is, 

in effect, merely the codification for 

classification determinations of the 

current practice with respect to the State 

and Defense Departments’ consideration 

of commodity jurisdiction requests. 

6. Paragraph (b)(2)—Parts Common 

Across All Product Lines That Should 

Be Excluded From ‘‘Specially Designed’’ 

The June 19 proposed definition of 

‘‘specially designed’’ included an 

exception for single, unassembled 

‘‘parts’’ commonly used in multiple 

types of commodities not enumerated 

on the USML or the CCL, with 

illustrative lists provided for threaded 

fasteners, other fasteners, and basic 

hardware. The preamble of the proposed 

rule noted that minor components were 

intentionally excluded from the scope of 

paragraph (b)(2). 

Commenters generally supported the 

concept of paragraph (b)(2), but some 

requested that the scope of paragraph 

(b)(2) be expanded to include minor 

components and to supplement the 

illustrative lists to specify more ‘‘parts’’ 

or ‘‘components’’ that could be released 

under paragraph (b)(2). In addition, 

some commenters requested that BIS 

confirm that variations in form or fit 

would not exclude a ‘‘part’’ from 

qualifying for the exclusion in 

paragraph (b)(2) and that BIS clarify the 

phrases ‘‘single unassembled’’ and 

‘‘multiple types of commodities.’’ 

With this final rule, BIS is confirming 

that variations in form or fit do not 

exclude parts or minor components 

from qualifying for paragraph (b)(2) and 

is thus adding the phrase ‘‘regardless of 

form or fit’’ to that paragraph to make 

the intent of the exclusion more 

explicit. Moreover, BIS concurs with the 

concerns regarding ambiguity of ‘‘single 

unassembled’’ and ‘‘multiple types of 

commodities.’’ BIS agrees with the 

commenters that using the phrase 

‘‘single unassembled’’ is redundant 

since that phrase is already captured in 

the definition of ‘‘part.’’ With respect to 

‘‘multiple types of commodities,’’ the 

intent was to provide an exception in 

(b)(2) for ‘‘parts’’ that are common 

across different products, such as 

aircraft and vehicles. ‘‘Multiple types of 

commodities’’ was not meant to apply to 

‘‘parts’’ common across different models 

of aircraft only or different versions of 

vehicles only. To improve clarity, BIS is 

removing both ‘‘single unassembled’’ 

and ‘‘multiple types of commodities’’ 

from (b)(2) in this final rule. 

While BIS did not intend for 

paragraph (b)(2) to include minor 

components, it appears that the June 19 

proposal included at least one minor 

component—nut plates. After reviewing 

the public comments, BIS has decided 

to retain nut plates and allow certain 

minor components to qualify for (b)(2). 

However, BIS is also reducing the scope 

of (b)(2) by removing the terms ‘‘other 

fasteners’’ and ‘‘basic hardware.’’ The 

‘‘parts’’ that were proposed to be 

described under ‘‘other fasteners’’ and 

‘‘basic hardware’’ will now be positively 

listed and will no longer constitute an 

illustrative list. Based on the public 

comments, BIS does not believe that 

‘‘basic hardware’’ provides enough 

clarity and that it could be construed 

more broadly than intended. Therefore, 

these changes result in making 

paragraph (b)(2) a positive list, with the 

exception of the illustrative list for 

threaded fasteners. 

These changes to (b)(2) allow for 

greater flexibility in terms of allowing 

certain minor components to be 

released, which was requested in 

several of the comments. These changes 

also ensure the ‘‘parts’’ and minor 

‘‘components’’ released under the 

paragraph (b)(2) exclusion will stay 

within clearly defined parameters. This 

will ensure that any release from 

‘‘specially designed’’ under paragraph 

(b)(2) will be consistent with U.S. 

national security interests by not 

allowing any other ‘‘parts’’ or other 

minor ‘‘components’’ to be released 

under paragraph (b)(2) than those noted 

in paragraph (b)(2). As noted above, 

there will be ‘‘parts’’ or other minor 

‘‘components,’’ that will not be released 

on the basis of paragraph (b)(2). This 

does not mean such ‘‘parts’’ or 

‘‘components’’ are necessarily 

‘‘specially designed’’ because another 

paragraph (b) exclusion may potentially 

release such ‘‘parts’’ or other minor 

‘‘components.’’ In addition, 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ or ‘‘software’’ that are 

not eligible for the paragraph (b)(2) 

exclusion may potentially be released 

under another paragraph (b) exclusion. 

If not, and they are caught by paragraph 

(a), then they would be ‘‘specially 

designed’’ and controlled under the 

relevant ECCNs. 

7. Paragraphs (b)(3)—(b)(6)—How the 

Exclusions Work Together 

Before getting into the discussion of 

the paragraph (b)(3) comments and 

provisions implemented in this final 

rule, it is important that the public 

understand how proposed paragraphs 

(b)(3), (b)(4) and (b)(5) work together. 

Having a better understanding of how 

these three exclusion paragraphs work 

together will help the public better 

understand the intent and scope of these 

three exclusion paragraphs, as well as 

the new paragraph (b)(6), discussed 

below, which was not contained in the 

June 19 (specially designed) proposed 

rule but is being added in this rule to 

simplify the application of paragraph 

(b)(4) . Paragraph (b)(6) is another 

example of a ‘‘development’’ exclusion 

similar to paragraphs (b)(4) and (b)(5) 

discussed here in relation to paragraph 

(b)(3). The June 19 (specially designed) 

rule definition included paragraphs 

(b)(3), (b)(4) and (b)(5). Each of these 

paragraph (b) exclusions would play an 

important and distinct role in the 

release portion of the ‘‘specially 

designed’’ definition. Some commenters 

seemed to have issues regarding 

understanding the role of these three 

different paragraphs and conceptually 

how they would work together to 

achieve the policy objectives of 

releasing certain ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ or ‘‘software.’’ 

The important thing to remember is 

that paragraph (b)(3) is the ‘‘production’’ 

exclusion. There is thus no need to 

know the original ‘‘development’’ 

history of the ‘‘part,’’ ‘‘component,’’ 

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‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ to rely on the paragraph 

(b)(3) exclusion. The paragraph (b)(3) 

exclusion recognizes that once a ‘‘part,’’ 

component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is used in 

the ‘‘production’’ of an EAR99 item or 

an item described on the CCL that is 

only controlled for AT-reasons that is 

not in a ‘catch-all’ paragraph, such a 

‘‘part,’’ ‘‘component,’’ accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ regardless 

of its original ‘‘development’’ history or 

its original significance has crossed over 

into broader commercial applicability 

and would no longer warrant control as 

‘‘specially designed.’’ 

This paragraph basically adopts the 

concept in the note to USML Category 

VIII (the ‘‘17(c) note’’) and the carveouts in USML Categories XI(c) and 

XII(e) that preclude an electronic, fire 

control, or other part, component, 

accessory or attachment that was once 

specifically designed or modified for a 

defense article from being ITAR 

controlled if it has entered into ‘‘normal 

commercial use.’’ BIS does not want its 

catch-all provisions pertaining to parts, 

components, accessories, and 

attachments to be more restrictive than 

the comparable provisions in the USML. 

Thus, for example, if an aircraft part 

would not be ITAR controlled as a result 

of the note in USML Category VIII, the 

part would not be controlled by 9A610.x 

as a result of the application of the 

definition of ‘‘specially designed.’’ 

Moreover, the policy in ITAR § 120.3(a) 

states that items designed or modified 

for military applications should not be 

ITAR controlled if they have 

predominant civil applications or 

performance equivalents to those of an 

article used in civil applications. To the 

extent an item meeting these standards 

nonetheless warrants control, the U.S. 

Government has an obligation to 

positively identify it on the USML or in 

a particular ECCN. If it does not, then 

such items should not be captured 

within the scope of a ‘‘specially 

designed’’ catch-all provision. 

Paragraph (b)(3) accomplishes this 

already existing ITAR policy in the EAR 

and applies it across the CCL. It is, thus, 

not a new idea, but merely a 

consolidation of existing control 

concepts in one definition. 

Unlike in paragraph (b)(3), in order to 

rely on either paragraphs (b)(4) and 

(b)(5), and also the new paragraph (b)(6) 

described below, the ‘‘development’’ 

history is important and must be 

known. The paragraphs (b)(4) and (b)(5), 

and also the new paragraph (b)(6), 

exclusions release certain ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ and ‘‘software’’ if the 

person has ‘‘knowledge’’ of the 

‘‘development’’ history and that meets 

the stated criteria in paragraphs (b)(4) or 

(b)(5). In summary, paragraph (b)(3) is 

the ‘‘production’’ exclusion. Paragraphs 

(b)(4) and (b)(5), and also the new 

paragraph (b)(6) described below, are 

the ‘‘development’’ exclusions. 

Some commenters noted concerns 

that applying paragraphs (b)(4) and 

(b)(5) for items that are decades old may 

be difficult because the original 

development history may no longer be 

known. If the original ‘‘development’’ 

history is no longer known, then a 

person could not rely on the paragraphs 

(b)(4) or (b)(5) exclusion or the new 

paragraph (b)(6) being added in this 

final rule. However, if the ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment’’ or ‘‘software’’ was truly 

‘‘developed’’ for use in the 

‘‘production’’ of those lower level items 

or for no particular purpose, the chances 

are good that the ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software,’’ would have subsequently 

been used in the ‘‘production’’ of an 

item that would meet the criteria of 

paragraph (b)(3), in which case the 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ would be 

excluded from ‘‘specially designed’’ on 

the basis of paragraph (b)(3) regardless 

of the original ‘‘development’’ history. 

Again, paragraphs (b)(4) and (b)(5) are 

not new ideas. Central to the existing 

ITAR and EAR export control structures 

is the concept that an item is not 

‘‘specially designed’’ for a controlled 

item if it was deliberately made for use 

in both controlled and uncontrolled 

applications, i.e., a ‘‘dual-use’’ item. The 

primary difference between the current 

concept and this new definition is that 

one must now be able to prove the 

design intent through contemporary 

documentation in order to be able to 

rely upon this release part of the 

mechanism. Without such 

documentation, parts and components 

that are used in or with controlled items 

and that do not otherwise meet one of 

the release provisions of paragraph (b) 

are ‘‘specially designed’’ items. BIS 

understands from the public comments 

that this is a more aggressive control 

stance than many perceive to be the case 

today. BIS nonetheless believes that it is 

better for the national security and other 

objectives of the reform effort in that it 

controls the items the U.S. Governments 

wants to control and creates more 

reliable, predictable rules that are easier 

to comply with. 

8. Paragraph (b)(3) (i.e., the 

‘‘Production’’ Exclusion)—Releasing 

Commodities and Software Equivalent 

to Existing Commodities and Software 

Used in the ‘‘Production’’ of Items That 

Are Not on the USML or CCL or 

Controlled for AT Reasons Only 

In the June 19 (specially designed) 

rule, BIS proposed an exclusion under 

paragraph (b)(3) for ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ or 

‘‘attachments’’ ‘‘caught’’ under 

paragraph (a) if such items have the 

same form, fit, and performance 

capabilities as a ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ or ‘‘attachment’’ used in or 

with a commodity that (i) is or was in 

‘‘production’’ and (ii) is either not 

enumerated on the USML or CCL, or is 

described in an ECCN controlled only 

for AT reasons. Additionally, while 

proposed paragraph (b)(3) requires the 

same form, fit, and performance 

capabilities, BIS can also confirm that 

paragraph (b)(3) does not require a 

design intent analysis and eliminates 

any concern that market fluctuations 

resulting in more sales to military 

applications in some years but not 

others could lead to an item’s having its 

classification status changed as a result. 

The most prevalent comment 

submitted in response to proposed 

paragraph (b)(3) was that the paragraph 

was too narrow by requiring the same 

form, fit, and performance capability for 

it to apply. Commenters recommended 

various changes, including allowing 

‘‘minor’’ changes in fit, certain changes 

in form, or only requiring the same 

performance capability. One commenter 

recommended that only certain types of 

changes in fit be allowed, and the 

commenter specified that those changes 

should be allowed for mounting, control 

values on electronic parts, or cosmetic 

changes. Other commenters requested 

clarification on specific instances of 

changes in form or fit, such as for 

conversion from British imperial units 

to metric units or changes to mounting 

brackets. Additionally, should the same 

form, fit, and performance capability be 

required, some commenters requested 

that BIS create a process to release items 

caught by ‘‘specially designed’’ if 

changes in form or fit are found to be 

insignificant, which BIS has accepted, 

but addressed the requested change 

under the discussion of revised 

paragraph (b)(1) above instead of here. 

Commenters also suggested that 

commodities previously determined 

under a CJ to be subject to the EAR 

should remain under EAR jurisdiction 

and not revert back to the ITAR under 

a ‘‘specially designed’’ control in the 

USML. BIS has also accepted this 

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change, but addressed the requested 

change under the discussion of revised 

paragraph (b)(1) and new § 748.3(e) 

CCATS process above instead of here. 

The June 19 proposed paragraph (b)(3) 

follows the same construct as § 120.3 of 

the ITAR in requiring the same form, fit, 

and performance capabilities. BIS used 

the criteria of the same form, fit, and 

performance capabilities because one 

change to a specific ‘‘part’’ or 

‘‘component’’ may be deemed to be 

minor or insignificant; however, the 

same change to the same ‘‘part’’ for a 

different ‘‘component’’ or end item may 

not be minor or insignificant. 

Consequently, BIS and its interagency 

partners do not agree with the 

comments that allowing a subjective 

significance test for changes made to 

any ‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

or ‘‘attachment’’ would be appropriate 

in the context of the paragraph (b)(3) 

exclusion. 

However, BIS and its interagency 

partners agree that there is a way to 

allow for certain changes in form and fit 

within the scope of the paragraph (b)(3) 

exclusion, while not opening the door of 

subjectivity that was at the core of the 

original rationale for requiring the same 

form, fit and performance capabilities. 

BIS is revising the introductory text of 

the paragraph (b)(3) exclusion to specify 

the commodity or software must have 

the same function, performance 

capabilities and the same or ‘equivalent’ 

form and fit as a commodity or software 

used in or with an item that is in 

‘‘production’’ that meets the criteria of 

paragraph (b)(3)(ii). The inclusion of 

‘equivalent’ form and fit addresses the 

public comments in this area and 

provides relief for insignificant or minor 

changes in form or fit, while still 

keeping this exclusion within the 

carefully drawn bounds of what was 

originally intended in the June 19 

(specially designed) rule. Such 

permissible changes in fit must be 

clearly identified to ensure no change in 

form or fit that may affect U.S. national 

security interests is released under 

paragraph (b)(3). The revised paragraph 

(b)(3) in this final rule addresses the 

comments in this area, while keeping 

consistent with the larger objectives BIS 

intends for the ‘‘specially designed’’ 

definition. 

9. Revised Note to Paragraph (b)(3) and 

New Notes 2 and 3 to Paragraph (b)(3) 

As a result of changes BIS is making 

to paragraph (b)(3) in this final rule to 

address the comments, BIS found it 

necessary to also make changes to the 

Note to paragraph (b)(3) included in the 

June 19 (specially designed) rule, and to 

add two notes to paragraph (b)(3). These 

two additional notes will further bound 

the paragraph (b)(3) exclusion to ensure 

the exclusion is not interpreted more 

broadly than intended. 

The original Note to paragraph (b)(3) 

included in the June 19 proposal is 

being redesignated as Note 1 to 

paragraph (b)(3) in this final rule. Some 

public comments requested additional 

guidance regarding the applicability of 

the Note to paragraph (b)(1) included in 

the June 19 (specially designed) rule 

proposal. BIS acknowledges that 

additional guidance should be provided 

regarding the applicability of the 

proposed Note to paragraph (b)(1). BIS 

is also including additional text to the 

Note to paragraph (b)(1) to describe the 

difference between development 

activities for ‘‘feature enhancements’’ 

versus those that ‘‘change the basic 

performance or capability’’ to address 

these comments requesting additional 

clarification. Specifically, this final rule 

is adding the phrase ‘‘such as those that 

would result in enhancements or 

improvements only in the reliability or 

maintainability of the commodity (e.g., 

an increased mean time between failure 

(MTBF))’’ after the phrase 

‘‘‘development’ activities’’ to further 

clarify the types of commodities or 

software that may be subject to 

subsequent ‘‘development’’ activities, 

but still stay within the scope of the 

paragraph (b)(3) exclusion. 

BIS is adding a new Note 2 to 

paragraph (b)(3) to define the term 

‘equivalent’ for purposes of the limited 

form and fit changes that are being 

allowed under the revised paragraph 

(b)(3) in this final rule. This new note 

will clarify that with respect to a 

commodity, ‘equivalent’ means that its 

form has been modified solely for fit 

purposes. As noted above, to allow for 

certain changes in form and fit to be 

permissible within the scope of the 

paragraph (b)(3) exclusion, it is 

important that the permissible form and 

fit changes be clearly defined. This new 

note will ensure the paragraph (b)(3) 

exclusion is not interpreted more 

broadly than is intended by BIS and also 

aid the public’s understanding. 

At the suggestion of commenters, BIS 

is also adding a new Note 3 to paragraph 

(b)(3) to define form, fit, performance 

capabilities and function for 

commodities and software in the 

context of the paragraph (b)(3) 

exclusion. Because form, fit, and 

performance capability are important 

terms used in the paragraph (b)(3) 

exclusion and have been referenced 

widely under the ITAR, BIS is adopting 

the explanatory text of the ITAR from 

the Note to § 120.4 of the ITAR, subject 

to slight revisions to make the 

definitions specific to the EAR. This 

explanatory text is being added as a new 

Note 3 to paragraph (b)(3) in this final 

rule. This new note will provide 

additional guidance to the public on 

how to interpret changes in form, fit, 

performance capabilities and function 

in the context of the paragraph (b)(3) 

exclusion. 

BIS is also making additional changes 

to the text of paragraph (b)(3) to improve 

the clarity of what was proposed in the 

June 19 (specially designed) rule and to 

address the expansion of paragraph 

(b)(3) to include ‘‘software.’’ Because 

software is being included in the 

paragraph (b) release, BIS is revising the 

introductory text of paragraph (b)(3) to 

add two references to ‘‘software.’’ Also, 

for the paragraph (b)(3)(ii) criteria, BIS 

is replacing ‘‘enumerated’’ with 

‘‘described’’ in relation to an ECCN 

controlled only for AT reasons because 

the use of ‘enumerated’ in that context 

conflicts with the definition of the term 

in Note 1, as was noted in the public 

comments. 

Commenters also suggested deleting 

the reference to ‘‘production’’ and 

removing the reference to paragraph 

(b)(3) in Note 1 to the definition as 

proposed in the June 19 (specially 

designed) rule. BIS does not accept this 

recommendation. BIS is maintaining the 

reference to ‘‘production’’ as (b)(3) is 

intended to address equivalence to 

existing items already in ‘‘production,’’ 

as opposed to those in ‘‘development.’’ 

Also, BIS is maintaining the reference to 

AT controls in (b)(3) of Note 1, because 

some AT controls have ‘‘specially 

designed’’ in their descriptions. BIS is 

removing the reference to ‘‘enumerated’’ 

because the public found this aspect of 

paragraph (b)(3)(ii) and its relationship 

to Note 1 unnecessarily complicated. 

This change will improve clarity and 

simplify applying the definition. 

Lastly, in evaluating whether the 

paragraph (b)(3) exclusion or any of the 

other paragraph (b) exclusions is broad 

enough in scope, it is important to 

review the specific paragraph (b) 

exclusion, such as paragraph (b)(3), in 

light of the other paragraph (b) 

exclusions included in this final rule. In 

the case of paragraph (b)(3), it is 

particularly important to also consider 

the revised paragraph (b)(1) described 

above that is creating a ‘release’ process 

whereby the public may submit 

additional ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ for 

reconsideration when they believe the 

changes in form or fit would make them 

no longer eligible for the paragraph 

(b)(3) exclusion, but still believe such 

items should be treated as insignificant 

or minor and therefore not warrant 

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being ‘‘specially designed.’’ This revised 

and slightly expanded paragraph (b)(3), 

working with the additional potential 

‘release’ under paragraph (b)(1) through 

the CJ process or the CCATS process 

described in § 748.3(e), addresses the 

public comments in regards to the 

paragraph (b)(3) exclusion being 

unnecessarily limited in scope. 

10. Paragraphs (b)(4) and (b)(5), and the 

New Paragraph (b)(6) (i.e., the 

‘‘Development’’ Exclusions)— 

Incorporating Intent During the 

Development Phase for Consideration of 

Whether To Exclude Certain 

Commodities From ‘‘Specially 

Designed’’ 

To address the concern that a first use 

of a ‘‘part’’ or ‘‘component’’ could result 

in the part or component being 

considered ‘‘specially designed,’’ BIS 

incorporated aspects of design intent 

into proposed paragraphs (b)(4) and 

(b)(5) and the new paragraph (b)(6) 

being added in this final rule. As noted 

above in the discussion on the 

relationship among paragraphs (b)(3), 

(b)(4) and (b)(5), and the new paragraph 

(b)(6), paragraphs (b)(4) and (b)(5) and 

the new paragraph (b)(6) are the 

‘‘development’’ exclusions. Under the 

June 19 proposal, paragraph (b)(4) 

would exclude ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ if they 

were or are being developed with a 

reasonable expectation of (i) use in or 

with commodities described on the CCL 

and commodities not enumerated on the 

CCL or USML, or (ii) use in or with 

commodities not enumerated on the 

CCL or USML. Paragraph (b)(5) would 

exclude ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ that 

are developed for no particular 

application. 

Some commenters mistakenly 

believed that paragraphs (b)(4) and 

(b)(5) depend on predominant market 

share of the item, while other 

commenters correctly understood that 

(b)(4) and (b)(5) were not dependent on 

predominant market share, but 

requested confirmation that their 

understanding was correct. BIS can 

confirm that market share does not have 

an impact on the applicability of 

paragraphs (b)(4) and (b)(5). Paragraphs 

(b)(4) and (b)(5) are rather dependent on 

intent during the ‘‘development’’ of the 

item. By definition, market share cannot 

be an issue because at the time of its 

‘‘development’’ the item had not yet 

been released to the market. Likewise, 

an evolving market (e.g., shift from 

primarily civilian customers to military 

customers) following release of the 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment’’ or ‘‘software’’ does not 

change the earlier determination made 

during the time of ‘‘development.’’ This 

approach essentially adopts the policy 

of § 120.3 of the ITAR that the 

‘‘intended use of the article * * * after 

its export (i.e., for a military or civilian 

purpose) is not relevant in determining 

whether the article’’ is subject to 

controls. Thus, again, BIS is not 

introducing a new concept in export 

control law, but rather applying more 

broadly in the EAR for classification 

purposes and in one definition a 

concept that is already in the ITAR’s 

statement of policy regarding the types 

of unspecified items that warrant 

control for export. In other words, the 

jurisdictional and classification status of 

an item should be set at its production 

and development stages and not affected 

by how it is later used. If something is 

so significant that it warrants control 

regardless of the intention of the 

designer, then it is the U.S. 

Government’s obligation to positively 

list that item on the USML or the CCL. 

‘‘Knowledge’’ of the original design 

intent must be demonstrated, however, 

by documents contemporaneous with 

‘‘development,’’ in their totality, as 

required under the Note to proposed 

paragraphs (b)(4) and (b)(5), which is 

now becoming Note to paragraphs (b)(4), 

(b)(5) and (b)(6) in this final rule as 

described below. Thus, for a reseller, 

laboratory, or other non-manufacturer to 

rely upon (b)(4) or (b)(5) or the new 

paragraph (b)(6) in determining that the 

item is not ‘‘specially designed,’’ such 

party must examine the source of 

‘‘development’’ for documentation or 

have some other reliable source 

regarding the original ‘‘development’’ 

history. This requirement does not 

increase the burden common to 

compliance practices today. It is 

possible, though, for a nonmanufacturer or any other party to use 

the exclusions under new paragraph 

(b)(1), or paragraphs (b)(2) or (b)(3), as 

discussed above, without having to rely 

on paragraphs (b)(4) or (b)(5) or the new 

paragraph (b)(6), which do require 

‘‘knowledge’’ of the original design 

intent based on the totality of 

documentation contemporaneous with 

the ‘‘development’’ to demonstrate the 

criteria in exclusion paragraphs (b)(4) or 

(b)(5) or the new paragraph (b)(6). 

With respect to (b)(4), BIS also 

received additional comments 

requesting clarification of the term 

‘‘reasonable expectation,’’ as well as 

replacing ‘‘described’’ with 

‘‘enumerated’’ in (b)(4)(i), replacing 

‘‘commodities’’ with ‘‘end items’’ in 

(b)(4)(i), replacing ‘‘use’’ with ‘‘ultimate 

use’’ in both (b)(4)(i) and (b)(4)(ii), and 

adding ‘‘both’’ to (b)(4)(i). To clarify 

‘‘reasonable expectation,’’ BIS has 

decided to replace the phrase with the 

term ‘‘knowledge,’’ which is already 

defined in part 772 of the EAR. By 

adopting the already defined term 

‘‘knowledge’’ for paragraph (b)(4), the 

release portion of the definition of 

specially designed will establish a more 

objective standard that will be more 

easily understood by the public. In 

developing the ‘‘specially designed’’ 

definition BIS has tried to rely as much 

as possible on established EAR terms 

and concepts. The public has generally 

been quite supportive of this approach 

of relying on established concepts and 

terms as much as possible in developing 

the ‘‘specially designed’’ definition. 

Adopting the term ‘‘knowledge’’ for 

paragraph (b)(4) and the new paragraph 

(b)(6) in this final rule is another 

example of simplifying the ‘‘specially 

designed’’ definition, while also 

establishing a more objective definition 

by relying on established terms and 

concepts under the EAR. BIS does not 

accept replacing ‘‘described,’’ 

‘‘commodities,’’ or ‘‘use’’ as those 

recommendations would make the 

paragraph (b)(4) exclusion too narrow. 

BIS did not accept the recommendation 

to add ‘‘both’’ to (b)(4)(i), but BIS is 

adding the term ‘‘also’’ to (b)(4)(ii) in 

this final rule. BIS is making this change 

to make the relationship between 

(b)(4)(i) and (ii) more explicit in terms 

of the criteria that must be met for a 

‘‘part,’’ ‘‘component,’’ ‘‘accessory, 

‘‘attachment,’’ or ‘‘software’’ to be 

excluded on the basis of the paragraph 

(b)(4) exclusion. 

For paragraph (b)(5), for the same 

rationale noted above for the changes to 

paragraph (b)(4), BIS, in this final rule, 

is also replacing ‘‘reasonable 

expectation’’ with ‘‘knowledge.’’ 

Because ‘‘knowledge’’ is now going to 

be included in the paragraph (b)(5) 

exclusion, BIS is also deleting the 

proposed Note to paragraph (b)(5). BIS 

is making this change because including 

the explanation of the definition of 

‘‘knowledge’’ from the June 19 

(specially designed) rule would be 

redundant given ‘‘knowledge’’ is already 

a defined term in part 772. 

As a clarification to what was 

proposed in the June 19 (specially 

designed) rule, BIS is making some 

additional changes to the wording of the 

paragraph (b)(5) exclusion. These 

changes do not change the scope of the 

exclusion proposed on June 19, but 

clarify what is being excluded from 

‘‘specially designed’’ on the basis of 

paragraph (b)(5). First, after the word 

‘‘developed,’’ BIS is adding the phrase 

‘‘as a general purpose commodity.’’ BIS 

is also adding an ‘‘i.e.,’’ in this final rule 

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after that new phrase to specify that a 

general purpose commodity is one that 

was or is being ‘‘developed’’ with no 

‘‘knowledge’’ of intended use in a 

particular commodity or type of 

commodity. 

In this final rule, BIS is removing the 

phrase ‘‘particular application’’ from 

what was proposed (b)(5) in the June 19 

(specially designed) rule and replacing 

it with ‘‘particular commodity’’ because 

commenters expressed concerns with 

the use of ‘‘application,’’ and BIS 

believes that using ‘‘commodity’’ will 

ensure maintaining the appropriate 

scope of (b)(5) and enhance clarity. In 

addition, to further address the public 

comments in this area in terms of 

adding greater specificity, BIS is adding 

a second qualifier with the phrase ‘‘or 

type of commodity’’ in this final rule. 

BIS is adding two illustrative examples 

for a particular commodity by adding 

the examples of an F/A–18 or HMMWV. 

For example, if the person has 

‘‘knowledge’’ a component was or is 

being developed for a F–18 or other 

military aircraft, such a commodity is 

not a general purpose commodity and 

therefore could not be excluded from 

‘‘specially designed’’ on the basis of 

paragraph (b)(5). BIS is also adding two 

illustrative examples for ‘‘a type of 

commodity’’ by including the examples 

of an aircraft and machine tool. For 

example, if the person has ‘‘knowledge’’ 

a part was or is being developed for an 

aircraft, such a commodity is not a 

general purpose commodity and 

therefore could not be excluded from 

‘‘specially designed’’ on the basis of 

paragraph (b)(5). 

BIS is adding a new paragraph (b)(6) 

in this final rule that will release from 

‘‘specially designed’’ ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments, and ‘‘software’’ where 

there is ‘‘knowledge’’ that it would be 

for use in or with commodities or 

software described in an ECCN 

controlled for AT-only reasons and also 

EAR99 commodities or software. This 

paragraph (b)(6) exclusion that is being 

added in this final rule will also release 

from ‘‘specially designed’’ those 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments’’ and ‘‘software’’ where 

the item was or is being developed with 

‘‘knowledge’’ that it would be 

exclusively for use in or with EAR99 

commodities or software. 

By adding the (b)(6) exclusion, BIS 

can simplify the application of 

paragraph (b)(4), including aligning it 

more closely with the structure and 

terminology used in paragraph (b)(3), 

along with addressing those scenarios 

where there is ‘‘knowledge’’ that the 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ was 

developed for use in or with 

commodities or software ECCNs 

controlled for AT-only reasons and 

EAR99 or exclusively for use in or with 

EAR99 commodities or software. BIS 

believes having a separate paragraph 

(b)(6) exclusion to release such ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ and ‘‘software,’’ will be 

easier to understand than trying to fit 

this exclusion within the scope of 

paragraph (b)(4). Finally, for the Note to 

paragraphs (b)(4) and (b)(5), one 

commenter stated that the 

recordkeeping requirement could be 

overlooked, and another commenter 

requested that military specifications be 

included as an example of 

documentation to establish the elements 

of (b)(4) or (b)(5). BIS is also updating 

the title of this note to reflect the new 

paragraph (b)(6) exclusion being added 

to the definition in this final rule. The 

revised note is Note to paragraphs (b)(4), 

(b)(5) and (b)(6). To address the concern 

of overlooking recordkeeping 

requirements, BIS is inserting a 

reference to the ‘‘specially designed’’ 

recordkeeping requirement in § 762.2 

(Records to be maintained) under a new 

paragraph (b)(50) as described below. 

BIS does not accept, however, the 

recommendation to add military 

specifications to the note. Generally, 

military specifications are not 

determinative of jurisdiction and are 

just one factor for consideration. Thus, 

they do not warrant inclusion in the 

illustrative list of contemporaneous 

documentation included in that note. 

11. Implementation of Definition of 

‘‘Specially Designed’’ 

Like the rest of this final rule, this 

definition of ‘‘specially designed’’ will 

become effective as of October 15, 2013. 

Some commenters asked that BIS phase 

and test the implementation for ‘‘600 

series’’ items only. BIS does not accept 

this recommendation. In order to ensure 

consistency with the multilateral 

regimes and reduce further complexity, 

BIS is adopting this definition of 

‘‘specially designed’’ for all uses of the 

term on the CCL. Because this definition 

is an important concept under the EAR, 

BIS will work to conduct outreach and 

develop tools to help the public’s 

review and use of the term. The 

Department of State has indicated it also 

intends to conduct similar outreach 

with the public for the use of the term 

under the ITAR. 

B. Other Definitions 

BIS proposed adding or revising 

several definitions to part 772 of the 

EAR under ECR. These definitions will 

aid in aligning the CCL with the USML 

by adopting common definitions for 

terms used in the CCL and the USML 

where possible. In total, this final rule 

adds or revises fifteen CCL terms. 

Specifically, this final rule adds twelve 

definitions to the EAR: ‘‘600 series,’’ 

‘‘600 Series Major Defense Equipment,’’ 

‘‘accessories,’’ ‘‘attachments,’’ ‘‘build-toprint technology,’’ ‘‘component,’’ ‘‘end 

item,’’ ‘‘equipment,’’ ‘‘facilities,’’ 

‘‘material,’’ ‘‘part’’ and ‘‘systems.’’ This 

final rule also revises three definitions 

currently in the EAR: ‘‘military 

commodity,’’ ‘‘dual use,’’ and ‘‘specially 

designed.’’ 

New or revised definitions for these 

terms were proposed in one or more of 

three rules published under ECR: the 

July 15 (framework) rule; the November 

7 (aircraft) rule; and the June 19 

(specially designed) rule. Definitions of 

‘‘end item,’’ ‘‘accessories and 

attachments,’’ and ‘‘specially designed’’ 

originally were proposed in the July 15 

(framework) rule and were re-proposed 

in revised form in the June 19 (specially 

designed) rule. The term ‘‘600 Series 

Major Defense Equipment’’ was not 

previously proposed as a definition; 

however, the concept was introduced in 

the June 21 (transition) rule and several 

commenters requested that it be 

included as a definition in part 772 of 

the EAR. As described in the June 21 

(transition) rule, the definition 

addresses items for which notification 

would be required to Congress prior to 

approval of certain high-value exports. 

This rule also revises the term ‘‘dual 

use’’ as a conforming change, although 

the change was not previously 

proposed. 

1. 600 Series 

This final rule adopts the definition of 

‘‘600 series’’ that was proposed in the 

July 15 (framework) rule without any 

substantive changes, except to remove a 

reference to the Commerce Munitions 

List, a phrase used in several of the 

proposed rules that has been removed to 

avoid confusion regarding whether the 

‘‘600 series’’ is part of the CCL. BIS did 

not receive any comments on the 

definition of 600 series. 

2. 600 Series Major Defense Equipment 

This rule adopts a definition of ‘‘600 

Series Major Defense Equipment’’ that 

includes all of the elements that were in 

the proposed Major Defense Equipment 

section of the June 21 (transition) rule, 

but adds an element, limiting ‘‘600 

Series Major Defense Equipment’’ to 

items contained in specified ‘‘600 

series’’ ECCN paragraphs. BIS did not 

receive any comments on the definition 

of Major Defense Equipment. 

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3. Component 

This final rule adopts the definition of 

‘‘component’’ that was proposed in the 

July 15 (framework) rule without any 

changes. 

One commenter suggested removing 

the example of ‘‘battery’’ from the 

‘‘component’’ definition because of 

potential ambiguity regarding whether a 

battery would be considered a 

‘‘component’’ or an ‘‘end item.’’ 

Specifically, the commenter questioned 

whether an item, such as a car battery 

that can put out an electrical charge 

whether it is incorporated into an 

automobile or not, would cause 

ambiguity regarding whether it is an 

‘‘end item’’ or a ‘‘component.’’ BIS is 

not changing the example of the 

‘‘battery’’ in the definition of 

‘‘component.’’ The revised ‘‘end item’’ 

definition that was proposed in the June 

19 (specially designed) rule also 

addressed this comment regarding the 

reference to a car battery in the example 

of ‘‘component.’’ BIS believes the 

primary reason for the commenter’s 

confusion was the use of the term 

‘‘stand-alone’’ in the ‘‘end item’’ 

definition that was proposed in the July 

15 (framework) rule. The re-proposed 

‘‘end item’’ definition included in the 

June 19 (specially designed) rule 

addressed this issue by removing the 

term ‘‘stand-alone.’’ This change to the 

definition of ‘‘end item’’ also addressed 

the comment here by resolving any 

potential perceived ambiguity regarding 

whether a ‘‘component,’’ such as car 

battery, would be an ‘‘end item.’’ 

Two commenters suggested that the 

definition of ‘‘component’’ improperly 

equates ‘‘components’’ and assemblies. 

The commenters noted that 

‘‘components’’ and assemblies should 

be distinct terms, as such, the definition 

of ‘‘component’’ should be limited to 

items that are not subject to 

disassembly. BIS does not agree with 

the commenter’s suggestion. During 

drafting of the July 15 (framework) rule, 

members of BIS’s Technical Advisory 

Committees (TACs) advised BIS that 

assemblies should be within the scope 

of the ‘‘component’’ definition. Based 

on the guidance provided by BIS’s TACs 

and the U.S. Government’s own 

analysis, BIS stated in the ‘‘component’’ 

definition that, for purposes of the 

definition, an assembly and a 

‘‘component’’ are the same. At this time, 

given only two commenters raised this 

issue, and BIS’s TACs, which comprise 

representatives from various industries, 

advised taking BIS’s proposed approach, 

BIS will not incorporate the suggestion 

because information from the TACs 

suggested that a number of industries 

involved in exporting treat assemblies 

as components and therefore the 

‘‘component’’ definition should reflect 

this. 

In addition, BIS does not agree that 

the criteria provided by one of the 

commenters for distinguishing between 

an assembly and a ‘‘component’’ would 

be sufficient. The criteria provided by 

the commenter would likely result in 

inadvertent decontrols of ‘‘components’’ 

on the CCL where a case could be made 

that the item in question is an assembly 

and not a ‘‘component.’’ The term 

‘‘component’’ is used extensively on the 

CCL and the term ‘‘assembly’’ much less 

so, so taking this commenter’s approach 

would likely have far reaching impacts 

on the scope of the CCL, which likely 

would be inconsistent with U.S. 

Government multilateral regime 

commitments to control certain 

components. As noted in the BIS 

response to the next comment, the U.S. 

Government intends to discuss with the 

Wassenaar Arrangement four entries in 

which the terms ‘‘components’’ and 

‘‘assemblies’’ are used in the same 

ECCN. The U.S. Government may 

reevaluate this issue after those 

discussions are complete. 

One commenter noted the need to 

update the headings and descriptions of 

certain items enumerated on the CCL. 

The commenter noted as an example 

that ECCN 9A003, which currently 

controls previously undefined 

‘‘specially designed assemblies and 

components’’ should be changed to 

reflect the new definitions of 

‘‘components’’ and ‘‘parts.’’ BIS has 

already taken steps to address this 

comment with the development of 

another ECR rule, Revisions to the 

Export Administration Regulations 

(EAR) to Make the Commerce Control 

List (CCL) Clearer. This rule is referred 

to as the (CCL Clean-up) rule. It will 

implement changes that published in a 

proposed rulemaking also entitled 

Revisions to the Export Administration 

Regulations (EAR) To Make the 

Commerce Control List (CCL) Clearer (77 

FR 71214, November 29, 2012). In the 

(CCL Clean-up) rule, BIS will make a 

number of changes to the CCL to 

incorporate the terms ‘‘parts’’ and 

‘‘components’’ in specific ECCNs and to 

address other issues such as the use of 

both ‘‘assemblies’’ and ‘‘components’’ in 

a number of ECCNs to conform to the 

definitions of ‘‘parts’’ and 

‘‘components’’ added in this final rule. 

These changes in the way ‘‘parts’’ and 

‘‘components’’ are used on the CCL will 

ensure that no changes are made to the 

status quo in terms of how the U.S. 

Government interprets these ECCNs. 

One commenter asked for clarification 

as to whether ‘‘software’’ can also be 

considered a ‘‘component.’’ BIS is 

clarifying here that the definition of 

‘‘components’’ does not include 

‘‘software.’’ ‘‘Software’’ is defined 

separately under part 772 of the EAR. 

One commenter provided an 

alternative definition of ‘‘components’’ 

that would remove the discussion of 

‘‘major components’’ and ‘‘minor 

components.’’ This commenter thought 

these proposed changes would add 

clarity and better distinguish 

‘‘components’’ from ‘‘accessories and 

attachments.’’ BIS is not incorporating 

this suggestion. The references to major 

components and minor components that 

were proposed in the July 15 

(framework) rule provide additional 

specificity regarding what is a 

‘‘component.’’ This additional text 

identifying the two types of components 

(i.e., major components and minor 

components) does not create ambiguity 

regarding what is a ‘‘component’’ and 

what is an ‘‘accessory’’ or an 

‘‘attachment.’’ In addition, although the 

terms ‘‘minor component’’ and ‘‘major 

component’’ are not widely used on the 

CCL, BIS intends over time and in 

conjunction with the multilateral export 

control regimes to use these ancillary 

terms of the ‘‘component’’ definition to 

further refine the scope of certain 

ECCNs. 

4. Equipment 

In response to the comments received 

on the July 15 (framework) rule, this 

rule changes the definition of 

‘‘equipment’’ from that definition that 

was proposed in the July 15 (framework) 

rule. The new definition of 

‘‘equipment’’ being adopted by BIS is 

consistent with the definition of 

‘‘equipment’’ proposed by DDTC in its 

November 28, 2012 proposed rule 

regarding Category XI (77 FR 70958). 

One commenter contended that there 

is no need to separate the ‘‘equipment’’ 

definition from the ‘‘end item’’ 

definition. The commenter noted that 

the term ‘‘equipment’’ is mentioned in 

the ‘‘end item’’ definition and is treated 

no differently from an ‘‘end item.’’ 

Accordingly, the commenter suggested 

that breaking ‘‘equipment’’ out as a 

separate definition adds confusion 

rather than clarity, and recommended 

that it be folded into the ‘‘end item’’ 

definition. BIS does not incorporate the 

suggestion because ‘‘equipment’’ is a 

sub-set of ‘‘end items,’’ but not all ‘‘end 

items’’ would meet the ‘‘equipment’’ 

definition. Similar to the relationship 

between the broader term ‘‘item’’ and 

narrower terms of ‘‘commodity,’’ 

‘‘software,’’ and ‘‘technology,’’ the 

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relationship between the broader term 

‘‘equipment’’ and ‘‘end items’’ is not 

mutually exclusive. The term 

‘‘equipment’’ is used extensively on the 

CCL and is used in the ‘‘600 series,’’ 

including in the ECCNs added with this 

final rule. In addition, the term 

‘‘equipment’’ is used extensively on the 

multilateral export control regime 

control lists, including the Wassenaar 

Arrangement Munitions List (WAML). 

Therefore, BIS has determined that 

adding a definition for this term is 

warranted and will assist the public in 

understanding the meaning of this term 

when used on the CCL. 

One commenter suggested replacing 

the phrase ‘‘assembled for a specific 

purpose’’ with the phrase ‘‘gathered, 

collected or compiled for a specific 

purpose’’ to avoid confusion about 

whether sets of tools or devices are 

assemblies or equipment. BIS does not 

agree with this suggestion. However, to 

clarify any confusion about the 

difference between ‘‘component’’ and 

‘‘equipment,’’ this rule changed the 

definition of ‘‘equipment’’ to be a 

‘‘combination of parts, components, 

accessories, attachments, firmware, or 

software that operate together to 

perform a specialized function of an end 

item or system.’’ BIS believes that this 

change to the definition of ‘‘equipment’’ 

clarifies any confusion raised by the 

proposed definition. 

For example, a laser device 

incorporated into a cutting saw that 

allows the operator to precisely line up 

the cut would be a ‘‘component.’’ A 

laser device that is assembled for the 

purpose of allowing a person to 

determine a straight line on a wall to 

hang a picture is an example of a laser 

device that would be ‘‘equipment.’’ The 

definitions of ‘‘component’’ and 

‘‘equipment’’ added to the EAR with 

this final rule are clear enough in scope 

to allow the public to make such 

distinctions. 

5. Facilities 

This final rule adopts the definition of 

‘‘facilities’’ that was proposed in the 

July 15 (framework) rule without any 

changes. 

One commenter suggested removing 

the phrase ‘‘a particular purpose’’ from 

the definition of ‘‘facilities,’’ and 

replacing it with the more specific 

phrase, ‘‘the particular purpose stated in 

the export control item using the term 

‘facilities.’ ’’ BIS agrees with the 

commenter’s general assumption 

regarding how controls on ‘‘facilities’’ 

are typically worded under the EAR, but 

the purpose of the definition of 

‘‘facilities’’ in part 772 is not intended 

to impose controls on any particular 

type of facility. The further 

identification of the types of ‘‘facilities’’ 

subject to control is in the particular 

ECCN entries and does not need to be 

referenced in the definition of 

‘‘facilities’’ in part 772. In the context of 

ECCNs or other controls under the EAR, 

such as end use controls that use the 

term ‘‘facilities,’’ those controls will 

specify the types of ‘‘facilities’’ that are 

subject to control. Therefore, no 

additional text is needed in the 

definition to clarify the type of 

‘‘particular purpose’’ that is controlled 

for an ECCN or other EAR control that 

uses the term ‘‘facilities.’’ 

6. Material 

This final rule adopts the definition of 

‘‘material’’ that was proposed in the July 

15 (framework) rule, with a minor nonsubstantive change to ensure that the 

definition conforms to the definitions of 

‘‘accessories’’ and ‘‘attachments’’ being 

added to part 772 in this final rule and 

discussed below. This conforming 

change separates the terms ‘‘accessories 

and attachments’’ into two distinct 

terms, ‘‘accessories’’ and ‘‘attachments,’’ 

as was proposed in the June 19 

(specially designed) rule. 

One commenter identified certain 

Product Group C ECCNs in CCL 

Category 1 controlled for Nuclear 

Nonproliferation (NP) reasons that were 

perceived to be inconsistent with the 

proposed ‘‘material’’ definition because 

they extend NP controls to certain end 

items, components, accessories, 

attachments, parts, software, systems, 

equipment, or facilities. BIS addresses 

this comment in this final rule by 

adding a sentence to the end of the 

definition making clear that material 

classified as a Product Group C ECCN 

remains classified as that ECCN even if 

the material can be identified as an ‘‘end 

item,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ ‘‘part,’’ ‘‘software,’’ 

‘‘system,’’ ‘‘equipment,’’ or ‘‘facility.’’ 

This new sentence also identifies the 

Product Group C ECCNs that deviate 

from the general definition. For 

example, ECCN 1C232 controls 

‘‘Helium-3 (3He), mixtures containing 

helium-3, and products or devices 

containing any of the foregoing.’’ Thus, 

a product containing the material 

Helium-3 (3He) that is also identifiable 

as a ‘‘component’’ or ‘‘part,’’ is still 

controlled under ECCN 1C232. 

One commenter suggested that 

‘‘software,’’ ‘‘system,’’ ‘‘equipment,’’ 

and ‘‘facilities’’ are so unlikely to be 

mistaken as ‘‘crude or processed matter’’ 

as to not warrant mention in the 

definition of ‘‘material,’’ unless the 

intention is to make ‘‘material’’ a catchall. This commenter believes the 

‘‘material’’ definition should simply be 

limited to the first part of the proposed 

definition, meaning material ‘‘is any 

list-specified crude or processed 

matter.’’ BIS does not agree because the 

term ‘‘processed matter’’ in particular 

has the potential to be interpreted 

broadly unless the exclusions are 

included in the definition of ‘‘material’’ 

as was proposed in the July 15 

(framework) rule. For example a ‘‘part’’ 

or ‘‘component’’ of an engine prior to 

entering the manufacturing process will 

likely be a type of processed material, 

such as a piece of hardened steel. As the 

production process progresses, the 

‘‘material’’ such as the hardened steel 

will transition from ‘‘processed matter’’ 

to a ‘‘part’’ or a ‘‘component’’ or some 

other type of item excluded from the 

‘‘material’’ definition. Once the 

processed ‘‘material’’ is identifiable as 

one of those types of items excluded 

from the ‘‘material’’ definition, it would 

no longer be controlled under Product 

Group C as a ‘‘material’’ and should 

therefore be controlled under the other 

ECCN entry as a ‘‘part’’ or ‘‘component’’ 

in either Product Groups A or B. 

One commenter recommended the 

deletion of the definition of ‘‘material’’ 

because the commenter had not 

identified a need for such a definition. 

The commenter also noted the proposed 

definition is in a negative, rather than 

the desired positive, format. BIS does 

not agree that this definition is not 

needed because adding this definition of 

‘‘material’’ helps to better align the CCL 

with how the term ‘‘material’’ is used 

under the USML and also how it is used 

under the Wassenaar Arrangement’s 

WAML. BIS does not agree the 

definition is written in the negative. The 

first part of the definition is written in 

positive terms and the second part 

excludes in a positive fashion those 

items within the scope of those other 

defined terms identified in the last 

sentence to the ‘‘material’’ definition. 

7. Military Commodity 

This final rule adopts the definition of 

‘‘military commodity’’ that was 

proposed in the July 15 (framework) 

rule. In response to comments, this final 

rule makes the reference to the ‘‘600 

series’’ Related Controls paragraphs 

more explicit by moving the Related 

Controls reference to the beginning of 

the list of ‘‘600 series’’ ECCNs 

referenced in the ‘‘military commodity’’ 

definition. In addition, this final rule 

adopts a more general reference to the 

related controls paragraphs for the ‘‘600 

series,’’ instead of identifying specific 

‘‘600 series’’ ECCNs, as was originally 

proposed in the July 15 (framework) 

rule. This approach is not substantively 

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different from the proposal in the July 

15 (framework) rule. Including a general 

reference to the ‘‘600 series’’ instead of 

separately listing each ‘‘600 series’’ 

ECCN will reduce the need to update 

this definition each time ECCNs are 

added to or removed from the ‘‘600 

series.’’ 

One commenter suggested that, in the 

definition of ‘‘military commodity,’’ the 

phrase ‘‘Related Controls for’’ be 

relocated to before reference to ‘‘600 

series’’ ECCNs. This would make it clear 

that none of these ECCNs covers 

‘‘military commodities.’’ BIS agrees that 

moving the ‘‘(Related Controls)’’ 

reference to the beginning of the ‘‘600 

series’’ ECCNs referenced in the 

‘‘military commodity’’ definition will 

communicate more clearly the intent of 

this cross reference to these ‘‘600 series’’ 

ECCNs. 

8. Part 

This final rule adopts the definition of 

‘‘part’’ that was proposed in the July 15 

(framework) rule without any changes. 

One commenter suggested expanding 

the scope of the ‘‘part’’ definition to 

include passive electrical parts. 

Specifically, this commenter suggested 

expanding the scope of the definition to 

include basic building block electrical 

parts, including, for example, 

capacitors, resistors, connectors, and 

thermistors, that are passive singlefunction parts (i.e., excluding active 

components such as integrated circuits 

that perform active, and in some cases, 

multiple functions). The definition of 

‘‘part’’ proposed in the July 15 

(framework) rule was intended as much 

as possible to create a common 

definition of this term under the EAR 

and the ITAR. BIS does not adopt the 

suggested change because it would blur 

distinctions between what is a ‘‘part’’ 

and a ‘‘component.’’ Adopting the 

commenter’s suggested change would 

broaden the scope of the ‘‘part’’ 

definition and would create a 

fundamental difference between the 

EAR definition and the ITAR definition 

of ‘‘part.’’ 

One commenter suggested deleting 

the definition of ‘‘part’’ and all 

references to ‘‘parts’’ in the EAR and 

ITAR. To support this position, the 

commenter cites the examples given in 

the definition of ‘‘part’’ that are 

explicitly excepted from the definition 

of ‘‘specially designed.’’ BIS is not 

incorporating either this suggested 

change of removing all ‘‘parts’’ 

references from the CCL or the 

suggestion to not add a definition of 

‘‘parts’’ to part 772 of the EAR. The 

intent of the CCL, among other things, 

is to control certain ‘‘parts.’’ As such, 

certain ECCNs describe ‘‘parts’’ that are 

subject to control under those ECCNs. 

The ‘‘600 series’’ ECCNs in particular 

would in most cases control ‘‘parts’’ 

under the .x and .y ‘‘items’’ paragraphs. 

This includes several of the ten ECCNs 

added to the CCL in this final rule. In 

terms of the reference to ‘‘parts’’ and 

‘‘specially designed,’’ this person was 

referring to the definition of ‘‘specially 

designed’’ that was proposed in the July 

15 (framework) rule. This same type of 

exclusion was also proposed in the June 

19 (specially designed) rule and the 

definition of ‘‘specially designed’’ 

included in this final rule. However, the 

commenter appears to be confused 

regarding the relationship between 

certain ‘‘parts’’ that may be excluded 

under paragraph (b)(2) of the ‘‘specially 

designed’’ definition and the definition 

of ‘‘parts.’’ Not all ‘‘parts’’ that are 

controlled on the CCL are ‘‘specially 

designed’’ ‘‘parts.’’ The commenter 

incorrectly infers that, because certain 

‘‘parts’’ are excluded from ‘‘specially 

designed’’ on the basis of being 

excluded under paragraph (b)(2), all 

‘‘parts’’ should therefore not be 

controlled on the CCL. This is not a 

correct interpretation of either the 

‘‘specially designed’’ definition or the 

intent of the U.S. Government in terms 

of how ‘‘parts’’ should be controlled on 

the CCL. The paragraph (b)(2) exclusion 

under ‘‘specially designed’’ also 

includes other criteria, which further 

refine the set of ‘‘parts’’ that would be 

excluded from ‘‘specially designed’’ on 

the basis of that exclusion paragraph. 

9. System 

This final rule adopts the definition of 

‘‘system’’ that was proposed in the July 

15 (framework) rule without any 

changes. 

One commenter expressed difficulty 

in distinguishing between what items 

would be captured under certain terms, 

in particular, the proposed definitions 

of ‘‘end items,’’ ‘‘components’’ and 

‘‘systems.’’ The commenter urged BIS to 

provide examples, illustrations, charts, 

or annotations to assist exporters in the 

uniform application of these terms. This 

commenter noted that the consequences 

of which definition applies is important, 

particularly under the proposed 

‘‘specially designed’’ definition and 

with respect to whether something is 

considered a ‘‘component’’ for purposes 

of License Exception STA eligibility for 

the ‘‘600 series.’’ BIS already addressed 

some of these concerns by proposing in 

the June 19 (specially designed) rule a 

revised definition of ‘‘end item’’ that 

would clarify the relationship between 

‘‘end items’’ and ‘‘components.’’ BIS is 

also developing a targeted outreach 

program to support exporters whose 

items will move from the USML to the 

CCL and who are less familiar with the 

EAR. As part of that outreach, BIS also 

intends to develop decision tools and 

other types of support information to 

assist the public in understanding and 

applying the definitions added or 

revised in this final rule, similar to the 

decision tree that was developed and 

posted on the BIS Web site in 2012 for 

License Exception STA. The June 19 

(specially designed) rule, in particular 

the lengthy preamble discussion that 

included numerous examples for how to 

apply the term ‘‘specially designed,’’ is 

representative of the types of training 

materials that BIS intends to develop for 

assisting the public in understanding 

and applying these other key terms. 

In the short-term, there will be some 

degree of adjustment as the public and 

the U.S. Government apply these new 

definitions. BIS is committed to 

supporting stakeholders during this 

transition period. These definitions will 

provide significant benefits by adding 

more specificity to the EAR for how 

these terms are defined and used in the 

CCL. In addition, these terms will play 

an important role in delineating 

between items on the USML and on the 

CCL. 

One commenter noted that, in the 

definition of ‘‘accessories and 

attachments’’ proposed in the July 15 

(framework) rule, a ‘‘system’’ is 

addressed separately from an ‘‘end 

item,’’ but the definition of ‘‘end item’’ 

includes systems, and the definition of 

‘‘systems’’ includes ‘‘end items.’’ This 

commenter believes the implication is 

that BIS considers ‘‘systems’’ as both 

‘‘end items’’ and elements of ‘‘end 

items.’’ This commenter thought 

additional explanation or examples 

would be helpful. 

In terms of the definition of 

‘‘accessories and attachments’’ proposed 

in the July 15 (framework) rule and reproposed as separate stand-alone 

definitions in the June 19 (specially 

designed) rule, an ‘‘accessory’’ or 

‘‘attachment’’ is not necessary, but 

enhances the operation of a 

‘‘component,’’ ‘‘end item’’ or ‘‘system.’’ 

The definitions of ‘‘system’’ and 

‘‘accessories’’ and ‘‘attachments’’ are not 

intended to be mutually exclusive. For 

example, a ‘‘system’’ could be made up 

of a combination of ‘‘accessories.’’ If 

such a ‘‘system’’ still met the definition 

of ‘‘accessories,’’ the item would be 

considered an ‘‘accessory’’ as well as a 

‘‘system.’’ 

Similarly, the definitions of ‘‘system’’ 

and ‘‘end item’’ are not intended to be 

mutually exclusive. A ‘‘system’’ can be 

an ‘‘end item,’’ provided the ‘‘system’’ 

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in question also meets the definition of 

‘‘end item.’’ However, not all ‘‘systems’’ 

will meet the definition of ‘‘end item.’’ 

For example, some ‘‘systems,’’ such as 

landing gear for an aircraft, consist of a 

combination of ‘‘parts’’ and 

‘‘components’’ that form a portion of a 

larger ‘‘end item’’ (e.g., an aircraft). In 

other cases, such as a computer system 

(consisting of a monitor, CPU, keyboard, 

and mouse), where a ‘‘system’’ is a 

combination of ‘‘end items’’ designed, 

modified, or adapted to operate together 

to perform a specialized function, the 

‘‘system’’ itself may also meet the 

definition of ‘‘end item.’’ 

One commenter suggested that, in the 

definition of ‘‘system,’’ the phrase ‘‘a 

specialized function’’ be changed to 

‘‘the function specified in the export 

control item using the term ‘system,’ ’’ 

because there is no other specialized 

function which is relevant to export 

controls. 

BIS does not incorporate this 

suggestion. Defined terms from part 772, 

such as ‘‘system’’ or ‘‘facilities,’’ that are 

used in the ECCN entries are further 

refined with control parameters 

included in those ECCNs. For that 

reason, BIS does not adopt this change. 

10. Build-to-Print Technology 

This final rule adopts the definition of 

‘‘build-to-print technology’’ that was 

proposed in the November 7 (aircraft) 

rule with a minor non-substantive 

change to conform to the standard 

format used in part 772 (i.e., the defined 

term appears first in italics and is 

followed with a sentence that begins the 

definition). 

Several commenters suggested 

broadening the scope of the proposed 

build-to-print technology definition, 

and one commenter noted that the 

proposed definition is not the same as 

the current ITAR definition. BIS does 

not accept the comment to broaden the 

scope of the build-to-print technology 

definition. Similar to how the term is 

used in the ITAR, the scope of the EAR 

definition is meant to be narrow. The 

suggested broadening of the definition 

would not be consistent with how the 

term is defined and used under the 

ITAR and also would be inconsistent 

with the policy objectives for the use of 

this term under the EAR for purposes of 

the ‘‘600 series.’’ Lastly, the EAR and 

ITAR definitions are slightly different 

because of the different regulatory terms 

used; however, the substantive control 

is identical. As much as possible, a 

common definition of build-to-print 

technology is being added to the EAR in 

this final rule to correspond to the ITAR 

definition, but both definitions will be 

tied to the respective regulations. 

11. Accessories 

This final rule adopts the definition of 

‘‘accessories’’ that was proposed in the 

June 19 (specially designed) rule. No 

comments were submitted on the 

proposed definition. 

12. Attachments 

This final rule adopts the definition of 

‘‘attachments’’ that was proposed in the 

June 19 (specially designed) rule. No 

comments were submitted on the 

proposed definition. 

13. End Item 

This final rule adopts the definition of 

‘‘end item’’ that was proposed in the 

June 19 (specially designed) rule. 

Two commenters suggested clarifying 

the applicability of the end item 

definition as it relates to integrated 

circuits (ICs) by adding the phrase 

‘‘capable of operating by itself and 

performing functions independent of 

any other item.’’ The concern was 

whether an IC would be an end item 

instead of a component. To further 

clarify this point, these commenters also 

suggested adding the term ‘‘computers’’ 

to the illustrative list of end item 

examples. 

BIS does not accept adding the phrase 

‘‘capable of operating by itself and 

performing functions independent of 

any other item’’ because it is not needed 

because the definition of ‘‘component’’ 

is adequate in its scope to capture ICs. 

However, to address the concern that 

ICs might be viewed incorrectly as end 

items, BIS clarifies here that ICs are 

classified as ‘‘components’’ and not an 

end item, which should address these 

two commenters’ concern. BIS does 

accept the suggestion of adding the term 

‘‘computers’’ to the illustrative list of 

end item examples. 

One commenter suggested adding the 

phrase ‘‘like electricity’’ as an example 

of another energy source that could be 

used to place an end item in its 

operating state. This commenter also 

suggested adding the term ‘‘fully’’ before 

the phrase operating state for clarity. 

BIS does not accept these changes 

because the intent of the definition is 

clear without these additions. 

14. Dual Use 

A conforming change is implemented 

in § 730.6 that was not previously 

proposed as was described above. To 

conform to the change to § 730.6, the 

definition of ‘‘dual use’’ in part 772 is 

also revised by adding the phrase ‘‘and 

certain munitions items listed on the 

Wassenaar Arrangement Munitions List 

(WAML)’’ in order to harmonize with 

the revised description of the scope of 

the EAR. 

XXIV. Part 774—The Commerce 

Control List 

A. Product Group Headings 

This rule implements changes 

proposed in the July 15 (framework) 

rule to the Product Group A heading by 

adding the new terms ‘‘end items,’’ 

‘‘accessories,’’ ‘‘attachments,’’ and 

‘‘parts.’’ These changes help with the 

structural alignment of the CCL and 

USML by ensuring these terms and 

control lists’ product group headings are 

used in a consistent way. The July 15 

(framework) rule also proposed adding 

double quotes around the term 

‘‘materials’’ in Product Group C. After 

evaluating the terms used in the heading 

of all the product groups, this rule adds 

double quotes around the terms ‘‘end 

items,’’ ‘‘equipment,’’ ‘‘accessories,’’ 

‘‘attachments,’’ ‘‘parts,’’ ‘‘components,’’ 

‘‘systems,’’ ‘‘software,’’ ‘‘technology,’’ 

‘‘production equipment,’’ and 

‘‘materials’’ because these terms are 

defined in part 772. 

B. ECCN 0A919 

Under ECCN 0A919, the EAR controls 

the reexports of certain foreign-made 

munitions not otherwise subject to the 

ITAR. The July 15 (framework) rule 

proposed expanding ECCN 0A919 to 

also include foreign-made munitions 

items that incorporate more than 10% 

‘‘600 series’’ controlled content. The 

June 21 (transition) rule proposed to 

further revise ECCN 0A919 to conform 

to the proposed revisions of the de 

minimis and foreign-produced direct 

product rules set forth in that proposed 

rule. The de minimis level for ‘‘600 

series’’ ECCNs is 0% for countries in 

Country Group D:5 of Supplement No. 

1 to part 740 and 25% for all other 

countries (see § 734.4 of the EAR). The 

foreign-produced direct product rules 

for ‘‘600 series’’ ECCNs may be found in 

§ 736.2(b)(3) of the EAR. 

One commenter stated, ‘‘The 

definition of ‘‘military commodity’’ and 

the chapeau exclude any item in the 

‘‘600 series.’’ Thus, a commodity listed 

in 0A600.a, b, or c. [sic] of 100% foreign 

manufacture might be decontrolled by 

the chapeau, and recontrolled by virtue 

of having more than 10% 600 series 

parts and components. At a minimum, 

the text needs to be rewritten to 

eliminate the conflict and to clarify the 

intent.’’ ECCN 0A919 is not intended to 

control foreign made ‘‘600 series’’ 

commodities as such. One must apply 

the characteristics within the Items 

paragraphs, only to the scope of 

commodities described in the Heading 

of the ECCN. The Items paragraphs 

further define what is caught by the 

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ECCNs; they do not expand the scope of 

the heading of an ECCN. 

One commenter on the June 21 

(transition) rule recommended adding 

‘‘U.S. origin’’ to paragraph d.2. BIS 

agrees this clarification is helpful and 

has done so in two places with the Items 

paragraphs. 

One commenter noted that proposed 

paragraphs .a and .c seem to contradict 

each other. BIS agrees that the text of 

the paragraphs in the Items section 

needs clarification. BIS noticed that the 

first introductory text was an 

undesignated paragraph. This rule 

removes paragraph .a, because it is for 

the most part the definition of ‘‘military 

commodities,’’ and replaces it with the 

introductory text, ‘‘ ‘‘Military 

commodities’’ having all of the 

following characteristics:’’ The word 

‘‘with’’ in the introductory text is 

replaced with ‘‘having’’ to conform to 

Wassenaar Arrangement wording. The 

definition for ‘‘military commodities,’’ 

from part 772, is added to the Related 

Definitions section of ECCN 0A919 for 

the convenience of the reader. 

Paragraph .b is redesignated as 

paragraph .a and is revised to read, 

‘‘produced and located outside the 

United States.’’ This change was made 

for two reasons. Some people were not 

clear that ECCN 0A919 only controls 

foreign-produced ‘‘military 

commodities’’ that are located outside 

the United States. Paragraph .c is 

redesignated as paragraph a.2 and is 

revised to remove the phrase ‘‘for a 

reason other than presence in the 

United States,’’ because this phrase 

made the sentence confusing. Basically, 

there are three ways a foreign-made 

‘‘military commodity’’ could be subject 

to the ITAR: (1) The foreign-made 

‘‘military commodity’’ contains an ITAR 

item; (2) The foreign-made ‘‘military 

commodity’’ is a direct product of ITAR 

technology; and (3) The foreign-made 

‘‘military commodity’’ is in the United 

States. If none of the three scenarios 

exists, the foreign-made item is not 

subject to the ITAR, but may be subject 

to the EAR and classified under ECCN 

0A919. 

One commenter requested 

clarification about the jurisdiction of 

ECCN 0A919 commodities that are 

located in the United States. When a 

‘‘military commodity’’ is in the United 

States, it is under the jurisdiction of the 

Department of State and subject to the 

ITAR. One commenter disagreed with 

the whole concept of ECCN 0A919, 

because the commodity would have one 

classification (0A919) and jurisdiction 

(BIS) when outside the United States 

and another classification and 

jurisdiction (Department of State’s 

DDTC) when in the United States. BIS 

has concluded that 0A919 may be 

complex, but it is necessary for national 

security reasons. Therefore, BIS does 

not accept the recommendation to 

remove ECCN 0A919. 

Paragraph .d is redesignated as 

paragraph a.3 and is revised by adding 

the word ‘‘Having’’ to the beginning of 

the phrase to conform to Wassenaar 

Arrangement wording. Paragraph d.1 is 

redesignated as paragraph a.3.a and is 

revised by adding ECCNs 6A003.b.3 and 

b.4.c, because these cameras were added 

by the publication of the Wassenaar rule 

on July 2, 2012. These changes were 

included in the July 15 rule, though 

prematurely. Paragraph d.2 is 

redesignated as paragraph a.3.b and is 

revised by adding the words ‘‘U.S.- 

origin’’ as suggested by a commenter for 

clarity. Paragraph d.3 is redesignated as 

paragraph a.3.c and is published as 

proposed. Double quotes are added 

around the term ‘‘military commodity’’ 

in the related controls and related 

definitions sections of ECCN 0A919, 

because this term is defined in part 772 

of the EAR. 

C. Aircraft and Related Items ‘‘600 

Series’’ ECCNs: Establishment of ‘‘600 

Series’’ ECCNs for Certain Military 

Aircraft and Related Items in ECCNs 

9A610, 9B610, 9C610, 9D610, and 

9E610 

In the November 7 (aircraft) rule, BIS 

proposed to control certain military 

aircraft and related items that the 

President determines no longer warrant 

control in USML Category VIII under 

new ECCNs 9A610, 9B610, 9C610, 

9D610, and 9E610. Specifically, the 

November 7 (aircraft) rule proposed that 

ECCN 9A610 would control the 

following: ‘‘end items’’ in paragraphs .a 

through .k (while reserving paragraphs 

.b through .e); Unmanned Aerial Vehicle 

(UAV)-related items identified on the 

Missile Technology Control Regime 

(MTCR) Annex in paragraphs .l through 

.n; ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ 

‘‘specially designed’’ for commodities in 

paragraphs .a through .k or defense 

articles in USML Category VIII in 

paragraph .x; and commodities 

‘‘specially designed’’ for a commodity in 

9A610 or defense article in USML 

Category VIII and warranting less strict 

controls because of little or no military 

significance in paragraph .y. ECCN 

9A610 would also include items 

currently controlled under ECCN 9A018 

paragraphs .a, .c, .d, .e, and .f. 

The November 7 (aircraft) rule also 

proposed the following related ECCNs. 

ECCN 9B610 would control test, 

inspection, and production equipment 

and related commodities ‘‘specially 

designed’’ for the ‘‘development’’ or 

‘‘production’’ of commodities 

enumerated in ECCN 9A610 or USML 

Category VIII. ECCN 9C610 would 

control materials ‘‘specially designed’’ 

for aircraft and related commodities 

controlled by ECCN 9A610 that are not 

specified elsewhere on the CCL, such as 

in CCL Category 1, or on the USML. 

ECCN 9D610 would control software 

‘‘specially designed’’ for commodities in 

ECCNs 9A610, 9B610, or 9C610. Finally, 

the November 7 (aircraft) rule proposed 

that ECCN 9E610 would control 

technology that is required for 

commodities in ECCNs 9A610, 9B610, 

or 9C610, as well as for software in 

ECCN 9D610. 

This rule adopts these new ECCNs 

with the changes described below. 

1. Review of Public Comments Related 

to ‘‘600 Series’’ for Certain Military 

Aircraft and Related Items 

In response to the November 7 

(aircraft) rule, BIS received a number of 

comments on the proposed ‘‘600 series’’ 

for military aircraft, and these 

comments are addressed below in this 

section. BIS also received comments in 

response to the November 7 (aircraft) 

rule that pertain to other aspects of ECR, 

such as grandfathering existing ITAR 

authorizations, ITAR exemptions versus 

EAR license exceptions, the definition 

of ‘‘specially designed,’’ and various 

licensing issues. These comments are 

addressed in this final rule under the 

applicable topic to which they relate. 

Finally, additional comments in 

response to the November 7 (aircraft) 

rule addressed issues outside of the 

scope of ECR, such as recalibrating 

controls on encryption and revisiting 

the proposed intra-company transfer 

license exception. As these comments 

are outside of the scope of the proposed 

rules addressed under this final rule, 

they are not addressed herein. 

2. Comments Regarding ECCN 9A610 

Two commenters submitted 

comments that any UAV that is 

specially designed for a military 

application, is not in Category I of the 

MTCR Annex, and does not include any 

specially designed capability covered by 

the USML, should be transferred to the 

CCL under either ECCN 9A610 or 

9A012. In addition, two commenters 

stated that the November 7 (aircraft) rule 

did not specifically address whether 

ECCN 9A012 would be eliminated in 

the same manner as ECCN 9A018. 

The Department of Defense-led review 

of USML Category VIII found that 

technical capabilities for UAVs do not 

provide the flexibility to differentiate as 

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finely as the comment suggested 

between critical and non-critical 

military systems. Consequently, the 

November 7 (aircraft) rule did not 

propose to include UAVs in ECCN 

9A610, and this final rule makes no 

changes to that proposal. With respect 

to ECCN 9A012, BIS did not propose 

any amendments in the November 7 

(aircraft) rule to 9A012, including 

removal of the ECCN, because 9A012 

would continue to control UAVs and 

related items that are not enumerated on 

USML Category VIII and are not 

‘‘specially designed’’ for a military use. 

One commenter suggested that Note 1 

to ECCN 9A610.a should be revised to 

make clear that the requirements of pre1956 manufacture applies only to 

‘‘unarmed military aircraft,’’ and not to 

other types of aircraft listed in the note. 

Specifically, the commenter proposed 

that unarmed military aircraft be moved 

into a new sentence as follows: ‘‘Other 

unarmed military aircraft, regardless of 

origin or designation, manufactured 

before 1956 and unmodified since 

manufacture are also included in the 

term ‘military aircraft’.’’ 

BIS accepts this recommendation in 

part. A comma has been added after 

‘‘lighter than air aircraft’’ to more clearly 

separate ‘‘unarmed military aircraft’’ 

from the rest of the series of items so 

that the pre-1956 manufacture applies 

only to ‘‘unarmed military aircraft.’’ The 

suggested sentence is not adopted as BIS 

believes that the change made to the 

sentence addresses the concern. 

In response to both the Department of 

State’s proposed rule for USML 

Category VIII and BIS’s November 7 

(aircraft) rule, one commenter 

recommended that bearings used in the 

landing wheels of stealth aircraft should 

be moved from proposed USML 

Category VIII(h)(1) to the CCL. In 

support of this recommendation, the 

commenter stated that these bearings do 

not relate to stealth or combat 

capabilities of the aircraft. 

Both the State Department’s and the 

Commerce Department’s proposed rules 

contemplated that parts, components, 

accessories, attachments, and 

equipment ‘‘specially designed’’ for 

enumerated aircraft possessing low 

observable characteristics would remain 

subject to the ITAR, and that such parts, 

components, accessories, attachments 

and equipment were retained on the 

USML for reasons beyond stealth 

capability. Neither rule stated that all 

parts merely ‘‘used’’ on those 

enumerated aircraft would be subject to 

the ITAR. Parts that are not ‘‘specially 

designed’’ but rather common to the 

military aircraft enumerated in Category 

VII(h)(1) and to other military aircraft 

and that are not enumerated on the 

USML or to civilian aircraft would be 

subject to the EAR. BIS believes that no 

change to the proposed rule is needed 

to clarify this point. 

One commenter believed that some 

ground equipment falling under ECCN 

9A610.f does not warrant NS and RS 

controls. The commenter recommended 

that the beginning of paragraph .y read 

as follows: ‘‘Specific ‘parts,’ 

‘components,’ ‘accessories and 

attachments’ and associated ground 

support equipment ‘specially designed’ 

for a commodity subject to control in 

this ECCN or a defense article in USML 

Category VIII * * *’’ Further, the 

commenter suggested that the following 

ground support equipment be added to 

9A610.y: blade positioning poles; 

dollies and carts; hand tools; inlet and 

other covers; jacks; tow bars; and tie 

down straps, lines, rings, and related 

hardware. 

The Departments of Defense, State, 

and Commerce reviewed the specified 

ground equipment for inclusion in 

9A610.y and found that such items do 

not in all cases merit inclusion in the .y 

paragraph. Thus, the interagency review 

found that such items are adequately 

described under the .x paragraph as 

parts, components, accessories, or 

attachments for ground equipment in 

9A610.f and that the ‘‘specially 

designed’’ parameter sufficiently limits 

excessive control of such items. 

One commenter stated that ECCN 

9A610.h would cover ‘‘canopies,’’ but 

the November 7 (aircraft) rule did not 

clarify whether 9A610 would also cover 

other types of windows or 

transparencies, such as door windows, 

cabin windows, or lenses, etc., 

regardless of their special characteristics 

(e.g., ballistic protection or 

electromagnetic interference). The 

commenter further suggested that 

transparencies for aircraft, other than 

canopies, should be identified in 

9A610.y. 

Proposed 9A610.h was intended to 

apply to parachute canopies, which are 

not related to windows and other 

transparencies used in aircraft. 

Nevertheless, the Departments of 

Defense, State, and Commerce reviewed 

transparencies for inclusion in 9A610.y 

and found that such items do not merit 

inclusion in the .y paragraph. Rather, 

such items are adequately controlled 

depending on whether they are 

‘‘specially designed’’ for defense articles 

in USML Category VIII or commodities 

in 9A610.a. Consequently, no change 

has been made as a result of this 

comment. 

Two commenters provided separate 

lists of commodities that they believed 

warranted control under the .y 

paragraph due to little or no military 

significance. These commodities 

included the following: air vents and 

outlets; cabin doors and door seals; crew 

and cabin seats; cargo rings; drain lines; 

fire extinguishers; flame and smoke/CO2

detectors; heating, air conditioning, and 

air management equipment; helicopter 

control mixers; junction boxes; lithiumion batteries and battery cells; map 

cases; ram air turbines; reservoirs; steps 

for crew and passenger entry and exit; 

windows and window seals; fasteners; 

light bulbs, fixtures, and lenses; safety 

items used when the aircraft is on the 

ground, known as ‘‘red gear’’ (e.g., safety 

pins with remove-before-flight 

streamers, engine outlet and inlet 

covers, grounding wires, etc.); flightline 

ground-handling/support equipment 

(e.g., tow vehicles and tow bars); lifts, 

jacks, ladders, and stands; power, 

hydraulic, heating, and cooling carts; 

ground crew-to-pilot communication 

gear; intermediate and depot-level 

support equipment for structural and 

hydraulic test and maintenance; nonRadar Cross Section (RCS) paints, 

coatings, primers, and application 

equipment; access doors and hatches; 

cargo systems and furnishings; fittings; 

light plates; insulation blankets; 

intercostals and gussets; floor panels 

and floor structure; seat tracks; shims; 

wire bundles; and labels, placards, 

name plates, and signs. 

The Departments of Defense, State, 

and Commerce reviewed the suggested 

items and agreed to add fire 

extinguishers, flame and smoke/CO2

detectors, and map cases to ECCN 

9A610.y. Many of the other items, such 

as fasteners, were not added to 9A610.y 

because the agencies believe that the 

definition of ‘‘specially designed’’ 

would preclude many of these items 

from being classified under ECCN 

9A610.x. (Fasteners are further 

addressed in the response immediately 

below.) Finally, other items suggested 

do not, in all cases, warrant control 

under the AT-only .y controls. Thus, 

they were not added to the list. 

In addition to recommending that 

fasteners be included in the .y 

paragraph, two commenters addressed 

further concerns regarding fasteners. 

Specifically, one commenter stated that 

fasteners designed for military aircraft 

are often special combinations of 

characteristics that are widely used in 

fasteners for civil applications. In 

addition, the commenter stated that 

multipart fasteners and fastening 

systems for military aircraft are often 

interchangeable with those for civilian 

aircraft. For these reasons, the 

commenter recommended that fasteners 

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should be considered EAR99 or 

9A991.d, but not 9A610.x. Another 

commenter supported the idea that the 

USML should control critical fasteners 

that contribute to the properties of key 

U.S. origin aircraft that have low 

observable features or characteristics, 

while recognizing that other types of 

fasteners are truly commercial in nature 

and require little or no export control. 

As discussed under the section on 

‘‘specially designed,’’ certain fasteners 

are precluded from being classified 

under ECCN 9A610.x due to paragraph 

(b)(2) of the definition of ‘‘specially 

designed,’’ and multipart fasteners may 

be eligible for the (b)(3) exclusion in the 

definition. If the fasteners were 

determined to be in an ECCN paragraph 

that does not contain ‘‘specially 

designed’’ as a control parameter or as 

EAR99 items under a prior CJ, they 

would also be precluded from being 

‘‘specially designed’’ under 9A610.x. 

Finally, in light of the proposed 

addition of paragraph (b)(1) to the 

definition of ‘‘specially designed,’’ 

organizations may submit a CCATS 

pursuant to new § 748.3(e) to request 

that a fastener be removed from control 

under 9A610.x if the fastener otherwise 

meets the definition of ‘‘specially 

designed.’’ 

One commenter stated the 

understanding that only forgings 

‘‘specially designed’’ for a specific list of 

U.S. origin aircraft that have low 

observable features or characteristics or 

U.S. Government technology 

demonstrators will be subject to 

continued control on the USML and that 

all other forgings ‘‘specially designed’’ 

for military aircraft would be on the 

CCL. 

Forgings would only be controlled on 

the CCL if the commodity for which 

they are ‘‘specially designed’’ is also on 

the CCL. Some parts and components 

for military aircraft are specifically 

enumerated in USML Category VIII(h). 

For many of the entries in Category 

VIII(h), parts and components ‘‘specially 

designed’’ therefor are also controlled. 

Consequently, forgings ‘‘specially 

designed’’ for such items are also 

controlled under USML Category 

VIII(h). 

One commenter stated that castings, 

forgings, and other unfinished products 

for parts in 9A610.x are themselves 

9A610.x if they are clearly identifiable 

by material composition, material, 

geometry, or function as controlled by 

9A610.x. The commenter further stated 

support that this language is consistent 

with WAML Category 16 when they are 

identifiable for material composition, 

geometry, or function. In addition, the 

commenter stated that although many 

forgings have a part number on them, 

they should not be on the CCL based on 

that part number unless the forging 

itself is identifiable as that part by 

material composition, geometry, or 

function. BIS does not agree with the 

commenter’s interpretation of the 

regulations. ‘‘Note 1’’ to ECCN 9A610.x 

states that forgings, castings, and other 

unfinished products, such as extrusions 

and machined bodies, are also 

controlled by 9A610.x if they ‘‘have 

reached a stage in manufacturing where 

they are clearly identifiable by material 

composition, geometry, or function as 

commodities controlled by ECCN 

9A610.x.’’ The note does not refer to 

part numbers. Thus, whether a forging 

or casting is stamped with a part 

number is not relevant to determining 

whether it is controlled by 9A610.x. 

3. Additional Changes Made to ECCN 

9A610 

BIS is amending proposed ECCN 

9A610 to make conforming changes due 

to the finalization of certain proposed 

rules published after the November 7 

(aircraft) rule. The Related Controls 

paragraph is amended to reflect the 

revised de minimis level for ‘‘600 

series’’ items, as proposed in the June 21 

(transition) rule and finalized in this 

rule. In addition, references using the 

defined term ‘‘accessories and 

attachments’’ have been changed to 

‘‘accessories’’ and ‘‘attachments’’ to 

reflect the separation of those defined 

terms, as proposed in the June 19 

(specially designed) rule and finalized 

in this rule. 

BIS has added the phrase 

‘‘mechanical properties’’ to the forgings 

and castings note to 9A610.x because 

there may be circumstances when the 

mechanical properties, as well as the 

material composition, geometry or 

function, of a forging, casting, or 

unfinished product may have been 

altered specifically for a 9A610.x part or 

component. BIS believes that the 

omission of ‘‘mechanical properties’’ 

from the list proposed in the November 

7 (aircraft) rule was an error, and it is 

being corrected in this rule. 

In the November 7 (aircraft) rule, Note 

1 to 9A610.a was generally intended to 

exclude all military aircraft 

manufactured before 1956 that do not 

have weapons from being controlled 

under 9A610. In order to make this 

concept more clear and to conform with 

the current text of the WAML, BIS is 

revising Note 1 and adding a Note 2 to 

9A610.a to clarify that military aircraft 

manufactured before 1946 and meeting 

the parameters described in Note 2 are 

not controlled under 9A610. Further, to 

address such aircraft manufactured from 

1946 to 1955, BIS is adding a new 

9A610.y.29 for military aircraft 

manufactured during that timeframe 

that also meet the parameters described 

in that provision. BIS is making these 

changes to improve clarity and to 

comply with multilateral regime 

requirements. 

BIS is also revising 9A610.f, .g, and .i 

to conform to the WAML. Also, BIS is 

renumbering entries within the Items 

paragraph to allow for ease of future 

revisions to the ECCN. These are not 

substantive revisions to the November 7 

(aircraft) rule. 

4. Comments Regarding ECCN 9B610 

Two commenters believed that the 

proposed text for ECCN 9B610 is too 

open-ended and appears to add 

additional control to hardware. They 

recommended revising the heading of 

the ECCN to read as follows: ‘‘Test, 

inspection and production ‘equipment’ 

‘specially designed’ for the 

‘development’ or ‘production’ of 

commodities enumerated in ECCN 

9A610 and having embedded 

technology that is exclusively or 

predominately used in the 

‘development’ or ‘production’ of the 

enumerated end item.’’ BIS believes that 

the use of ‘‘specially designed’’ is 

sufficiently limiting to preclude ECCN 

9B610 from being an open-ended 

control. Therefore, no change has been 

made to 9B610 as a result of this 

comment. 

One commenter stated that all entries 

in 9B610.a through .y list the limiting 

text ‘‘specially designed’’ with the 

exception of 9B610.b for environmental 

test facilities. Under 9B610.b, only the 

word ‘‘designed’’ is used. To avoid overcontrolling items, the commenter 

suggested using ‘‘specially designed’’ in 

9B610.b. BIS accepts this 

recommendation, and has amended 

9B610.b to replace ‘‘designed’’ with 

‘‘specially designed.’’ 

BIS is also making correctional and 

clarifying changes to this ECCN. BIS is 

correcting the scope of controls for 

9B610.a to read: ‘‘Test, inspection, and 

production ‘equipment’ ‘specially 

designed’ for the ‘production, 

‘development,’ repair, overhaul or 

refurbishment of commodities . . .’’ 

This change conforms to the text 

proposed in 9B619.a. Also, BIS is 

adding a reference to new USML 

Category VIII(h)(i) in the Related 

Controls paragraph. 

5. Comments Regarding ECCNS 9D610, 

9E610, and Availability of License 

Exception STA 

As previously discussed under the 

section on License Exception STA, BIS 

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is removing proposed Supplement No. 4 

to part 740 to move restrictions on the 

use of License Exception STA for ‘‘600 

series’’ software and technology to the 

STA paragraph in the License 

Exceptions section of the applicable 

‘‘600 series’’ ECCN. To effect this 

change for ECCNs 9D610 and 9E610, 

BIS has revised the Items paragraphs of 

those ECCNs to specifically name the 

restricted software or technology in the 

ECCN itself. 

Following this new framework, ECCN 

9D610.b now controls software for the 

‘‘development’’ or ‘‘production’’ of 

items previously described in 

paragraphs (a)(1) through (a)(15) in 

proposed Supplement No. 4 to part 740. 

While this revision does not 

substantively affect the reasons for 

control applying to the software at issue 

(or any software controlled under 

9D610), this change more positively 

enumerates this software in 9D610.b. To 

correspond with this change, the 

following additional revisions have 

been made to 9D610: revised 

descriptions of the applicability of the 

reasons for control to the specific 

paragraphs within 9D610, revised 

description of eligibility under the STA 

paragraph in the License Exceptions 

section of 9D610 to add that paragraph 

(c)(1) of License Exception STA 

(§ 740.20(c)(1)) may not be used for 

software described in 9D610.b, and 

removal of the note to the License 

Exceptions section. 

For ECCN 9E610, 9E610.b now 

controls ‘‘technology’’ (other than 

‘‘build-to-print technology’’) ‘‘required’’ 

for the ‘‘development’’ or ‘‘production’’ 

of any of the items previously described 

in paragraphs (a)(1) through (a)(15) in 

proposed Supplement No. 4 to part 740. 

As with 9D610, this revision does not 

substantively affect the reasons for 

control that apply to such technology. 

To correspond with this change, the 

following additional revisions have 

been made to 9E610: revised 

descriptions of the applicability of the 

reasons for control to the specific 

paragraphs within 9E610, revised 

description of eligibility under the STA 

paragraph in the License Exceptions 

section of 9E610 to add that paragraph 

(c)(1) of License Exception STA 

(§ 740.20(c)(1)) may not be used for 

software described in 9E610.b., removal 

of the note to the License Exceptions 

section, and an insertion of a note to 

paragraph .a with respect to ‘‘build-toprint technology’’ for the ‘‘production’’ 

of items in paragraphs b.1 through b.15. 

In addition to inserting 9D610.b, BIS 

is also not finalizing 9D610.b and .c that 

were proposed in the November 7 

(aircraft) rule to control software related 

to commodities controlled for MT 

reasons under ECCNs 9A610 and 9B610. 

BIS is making this change to conform 

with the revised applicability of the MT 

reason for control to ECCN 9D610, 

which simplifies the description of 

software subject to MT controls. 

BIS did receive comments pertaining 

to the specific software and technology 

that was proposed to be restricted from 

use of License Exception STA under the 

November 7 (aircraft) rule. Descriptions 

of the comments with BIS’s responses 

are below. 

One commenter recommended that 

the words ‘‘except for Military 

Commercial Derivative Aircraft’’ be 

deleted from paragraphs (a)(6) and (a)(7) 

of Supplement No. 4 to part 740. The 

commenter reasoned that this exclusion 

refers to technology in ECCN 9E003, and 

could thus result in confusion that 

9E003 technology is subject to the 

limitations on the use of STA and GOV 

described in Supplement No. 4. BIS 

does not accept this recommendation. 

The reference to military commercial 

derivative aircraft is a carve-out of the 

STA license exception and is not 

limited to ECCN 9E003. 

One commenter stated that the use of 

an aircraft weight threshold (i.e., 21,000 

pounds) to determine which landing 

gear, parts, and components are subject 

to the restrictions in paragraph (a)(7) in 

Supplement No. 4 to part 740 is 

impractical. Instead, the commenter 

recommended that BIS specifically 

identify those categories of aircraft that 

would be subject to paragraph (a)(7). BIS 

does not accept this recommendation. 

Using the categories of aircraft as the 

parameter to identify the software and 

technology to be excluded from STA 

and most GOV eligibility would be 

impractical. This would lead to an 

exhaustive list that would be constantly 

changing based on new developments. 

Two commenters expressed concerns 

that the scope of software under 9D610 

and technology under 9E610 that would 

be restricted from STA eligibility is too 

broad. They commented that the 

restriction would apply to nearly every 

part and component on an aircraft 

platform, that the items affected are 

common to commercial aircraft for 

which technology and software can 

already be exported without a license, 

and that many STA-eligible countries 

already participate in the development 

and production of the items at issue and 

have comparable indigenous software 

and technology. In addition, one of the 

commenters felt that this framework 

makes the use of STA more complex. 

The restriction on the use of License 

Exception STA applies to software and 

technology related to parts and 

components ‘‘specially designed’’ for 

military aircraft controlled under USML 

Category VIII or ECCN 9A610. While 

there may be similarities between these 

items and commercial equivalents, the 

interagency review identified these 

items as warranting closer review. In 

addition, the use of License Exception 

STA for ‘‘600 series’’ items is to support 

military activities rather than 

development activities. As a result, 

parts and components may be exported 

or reexported under License Exception 

STA, but certain software and 

technology related to the 

‘‘development’’ or ‘‘production’’ of the 

specified parts and components may not 

be exported or reexported under STA. 

Also, as previously described, BIS is 

changing the STA framework to make it 

less complex. 

No changes have been made to reduce 

the scope of aircraft software or 

technology subject to the restriction on 

the use of License Exception STA. 

However, as described in section 

XXIV.C.6, BIS is correcting 9D610 and 

9E610, which impacts the scope of 

software and technology, respectively, 

controlled under those ECCNs. Also, as 

previously mentioned, BIS is removing 

proposed Supplement No. 4 to part 740 

to make the framework on STA 

restrictions for ‘‘600 series’’ items less 

complicated. 

One commenter objected to the 

terminology ‘‘types of parts and 

components’’ in paragraph (a) of 

Supplement No. 4 to part 740 (i.e., 

‘‘License Exception STA may not be 

used . . . [for] ‘software’ or . . . 

‘technology’ for the ‘development’ or 

‘production’ of any of the types of ‘parts’ 

or ‘components’ listed below.’’). The 

commenter stated that this wording 

implies that other parts and components 

are captured, and thus ‘‘types of’’ 

should be deleted. 

This final rule does remove the use of 

‘‘types of’’ by not finalizing proposed 

Supplement No. 4 to part 740 and 

moving the description of the items in 

that supplement to ECCNs 9D610 or 

9E610. However, this change was made 

to simplify License Exception STA. The 

use of the term ‘‘types of’’ was not 

intended to control every part and 

component of an aircraft, but rather the 

parts and components with similar 

functionality. 

6. Additional Changes Made to ECCNs 

9D610 and 9E610 

BIS is correcting 9D610 and 9E610 to 

remove software ‘‘specially designed’’ 

for the ‘‘development’’ or ‘‘production’’ 

of fuel cells that are ‘‘specially 

designed’’ for use in UAV or Lighterthan-Air-Vehicles. Such fuel cells will 

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be enumerated in USML Category VIII, 

so related software should also be 

controlled under the ITAR rather than 

the CCL. 

BIS is also amending ECCNs 9D610 

and 9E610 to make conforming changes 

due to the finalization of certain 

proposed rules published after the 

November 7 (aircraft) rule. The Related 

Controls paragraph of 9D610 is 

amended to reflect the revised de 

minimis levels for ‘‘600 series’’ items, as 

proposed in the transition rule and 

finalized in this rule. The Related 

Controls paragraph of 9E610 is also 

revised to reflect the revised de minimis 

levels, but this final rule removes 

entirely the reference to ECCN 0A919 

foreign-made ‘‘military commodities’’ 

because technology would not be 

considered for conducting a de minimis 

calculation for a commodity. In 

addition, to improve clarity and make 

corrections, this rule merges 9D610.y.1 

and y.2 into 9D610.y, merges 9E610.y.1 

and y.2 into 9E610.y, and inserts the 

descriptor ‘‘software’’ in 9E610.y since 

that entry applies to certain technology 

related to 9D610 software. Finally, after 

interagency review, on the correct scope 

of intended controls BIS is removing 

installation, repair, overhaul, and 

refurbishing ‘‘software’’ from 9D610; 

and adding refurbishing ‘‘technology’’ to 

9E610.y. 

D. Gas Turbine Engines and Related 

Items ‘‘600 Series’’ ECCNs: 

Establishment of ‘‘600 Series’’ ECCNs 

for Certain Military Gas Turbine Engines 

and Related Items in ECCNs 9A619, 

9B619, 9C619, 9D619, and 9E619 

In the December 6 (gas turbine 

engines) rule, BIS proposed to control 

certain military gas turbine engines and 

related items that the President 

determines no longer warrant control in 

USML Category VIII (or new Category 

XIX) under new ECCNs 9A619, 9B619, 

9C619, 9D619, and 9E619. These ECCNs 

were proposed in conjunction with the 

Department of State’s proposal to create 

USML Category XIX under the proposed 

rule, Amendment to the International 

Traffic in Arms Regulations: 

Establishment of U.S. Munitions List 

Category XIX for Gas Turbine Engines, 

(12/06/11, 76 FR 76097) (RIN 1400– 

AC98). Specifically, the December 6 (gas 

turbine engines) rule proposed that 

ECCN 9A619.a through .d would 

control, while reserving paragraphs .e 

through .w, gas turbine engines 

‘‘specially designed’’ for military use 

that would not be controlled under 

proposed USML Category XIX, digital 

engine controls ‘‘specially designed’’ for 

gas turbine engines in ECCN 9A619, hot 

section components and related cooled 

components ‘‘specially designed’’ for 

gas turbine engines in ECCN 9A619, and 

engine monitoring systems for gas 

turbine engines and components in 

ECCN 9A619. ECCN 9A619.x would 

consist of ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories and attachments’’ 

(including certain unfinished products 

that have reached a stage in 

manufacturing where they are clearly 

identifiable as commodities controlled 

by paragraph .x) that are ‘‘specially 

designed’’ for a commodity in ECCN 

9A619 (other than ECCN 9A619.c) or a 

defense article in proposed USML 

Category XIX and not elsewhere 

specified in the CCL or on the USML. 

Paragraph .y would consist of eight 

specific types of commodities that, if 

‘‘specially designed’’ for a commodity 

subject to control in ECCN 9A619 or a 

defense article in proposed USML 

Category XIX, warrant less strict 

controls because they have little 

military significance. 

The December 6 (gas turbine engines) 

rule also proposed the following related 

ECCNs. ECCN 9B619 would controls 

test, inspection, and production 

‘‘equipment’’ and related commodities 

‘‘specially designed’’ for the 

‘‘development’’ or ‘‘production’’ of 

commodities enumerated in ECCN 

9A619 or proposed USML Category XIX. 

One specific item, a bearing puller, was 

enumerated in the proposed .y 

paragraph of 9B619. ECCN 9C619 would 

control materials ‘‘specially designed’’ 

for commodities controlled by 9A619 

not elsewhere specified in the CCL or on 

the USML. ECCN 9D619 would control 

software ‘‘specially designed’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of military 

gas turbine engines and related 

commodities controlled by 9A619. 

Finally, the December 6 (gas turbine 

engines) rule proposed that ECCN 9E619 

would control ‘‘technology’’ ‘‘required’’ 

for the ‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, overhaul, or refurbishment of 

military gas turbine engines and related 

commodities controlled by 9A619, 

equipment controlled by 9B619, 

materials controlled by 9C619, or 

software controlled by 9D619. 

This rule adopts these new ECCNs 

with the changes described below. 

1. Review of Public Comments Related 

to ‘‘600 Series’’ for Certain Military Gas 

Turbine Engines and Related Items 

In response to the December 6 (gas 

turbine engines) rule, BIS received a 

number of comments on the proposed 

‘‘600 series’’ for military gas turbine 

engines, and these comments are 

addressed below in this section. BIS 

also received comments in response to 

the December 6 (gas turbine engines) 

rule that pertain to other aspects of ECR, 

such as the de minimis threshold for 

‘‘600 series’’ items, grandfathering 

existing ITAR authorizations, ITAR 

exemptions versus EAR license 

exceptions, etc. These comments are 

addressed in this final rule under the 

applicable topic to which they relate. 

Finally, additional comments addressed 

issues outside the scope of ECR, such as 

program licensing and the proposed 

intra-company transfer license 

exception. As these comments are 

outside of the scope of the proposed 

rules addressed under this final rule, 

they are not addressed herein. 

2. Comments Regarding Separate USML 

Category and ‘‘600 Series’’ ECCNs for 

Gas Turbine Engines 

One commenter stated that gas 

turbine engines and associated 

equipment should be controlled under 

the same USML category that controls 

the end-item platform and that 

delineating between the end-item 

platform and engine components may 

be difficult in some cases. In addition, 

the commenter stated that if a new 

USML category is created for gas turbine 

engines, then the category should 

include the existing USML Category VIII 

note regarding Section 17(c) of the 

Export Administration Act (EAA), as 

amended. The commenter believed that 

omission of the note could be 

interpreted to mean that certification by 

the Federal Aviation Administration 

would no longer be applicable to 

determine licensing jurisdiction for 

aircraft engines. 

The Departments of Defense, State, 

and Commerce believe that gas turbine 

engines are sufficiently different to 

warrant a separate USML category and 

separate ‘‘600 series’’ ECCNs, so BIS is 

maintaining the use of the 9Y619 series 

for controlling certain military gas 

turbine engines. With respect to the note 

in USML Category VIII regarding 

Section 17(c) of the EAA, the agencies 

believe that any concerns with the 

removal of the note would be 

adequately addressed by the definition 

of ‘‘specially designed.’’ Thus, if an 

engine or engine part or component 

would not be subject to the ITAR as a 

result of the application of the note to 

USML Category VIII (the ‘‘17(c)’’ note) 

then that engine or part, by virtue of the 

application of the definition of 

‘‘specially designed,’’ would not be 

subject to the controls of 9A619. 

3. Comments Regarding ECCN 9A619 

For the Related Controls paragraph of 

ECCN 9A619, one commenter stated 

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that the phrase ‘‘directly related’’ should 

be replaced with ‘‘required’’ in the 

sentence ‘‘[m]ilitary gas turbine engines 

and related articles that are enumerated 

in USML Category XIX, and technical 

data (including software) directly 

related thereto, are subject to the 

jurisdiction of the International Traffic 

in Arms Regulations.’’ 

BIS does not accept this 

recommendation as the phrase ‘‘directly 

related’’ is intended to correlate with 

the wording used in USML Category 

XIX. The reference to USML Category 

XIX in the Related Controls does not 

impose any requirements independent 

of those in USML Category XIX, so there 

is no need to define that term for 

purposes of the EAR. Any interpretation 

of that term must be consistent with the 

requirements of the ITAR. 

One commenter pointed out potential 

overlapping controls with ECCN 

9A619.a and proposed USML Category 

XIX. ECCN 9A619.a controls military 

gas turbine engines ‘‘specially 

designed’’ for a military use that are not 

controlled in USML Category XIX(a), 

(b), or (d). However, proposed USML 

Category XIX(c) also controls such 

engines. The commenter recommended 

that 9A619.a be revised to exclude 

engines enumerated in USML Category 

XIX(c), in addition to XIX(a), (b), and 

(d). BIS accepts this recommendation 

and has included USML Category XIX(c) 

along with the reference to XIX(a), (b), 

and (d) in ECCN 9A619.a. 

Two commenters stated that the 

definition of ‘‘military gas turbine 

engines’’ used in ECCN 9A619.a should 

be added to § 772.1 of the EAR and to 

the USML. BIS does not accept the 

recommendation to add ‘‘military gas 

turbine engines’’ to § 772.1 as the text 

was intended to provide objective 

criteria by which to determine 

jurisdiction and classification rather 

than to provide a definition. 

Four commenters raised several 

concerns regarding the control of hot 

section components under proposed 

ECCN 9A619.c. The commenters 

believed that 9A619.c would be a 

significant expansion of controls for 

such items as many components would 

move to the USML and be considered 

significant military equipment under 

the ITAR. Further, one commenter 

requested confirmation that the listed 

hot section components are the only hot 

section components controlled. Two 

commenters recommended that the 

definition of hot section components be 

consistent with the current USML 

definition, which was published by 

DDTC in 2008. In addition, one 

commenter recommended that 9A619.c 

be split into two parts as follows—(i) 

hot section parts and components (i.e., 

combustion chambers and liners; high 

pressure turbine blades, vanes, disks 

and related cooled structure; cooled low 

pressure turbine blades, vanes, disks 

and related cooled structure; cooled 

augmenters; and cooled nozzles) 

‘‘specially designed’’ for gas turbine 

engines controlled in this ECCN 9A619; 

(ii) uncooled turbine and exhaust 

system components not specified in 

9A619.c.1 (i.e., uncooled intermediate 

and low turbine vanes, blades, disks, 

and ‘‘tip shrouds;’’ exhaust liners, tail 

cones, and nozzles) for engines 

controlled in this ECCN 9A619 or in 

USML XIX, except for engines 

controlled by USML XIX(f)(1). The 

commenter further recommended that 

the description of items in 9A619.c was 

redundant in identifying subsets of parts 

already more broadly described and that 

proposed USML Category XIX(f)(2) 

contained a reference to ‘‘combustor 

shells’’ whereas proposed 9A619.c did 

not. 

When reviewing gas turbine engines 

and related items, the Departments of 

Defense, State, and Commerce did not 

intend to move hot section parts and 

components currently controlled on the 

CCL to the USML. To address this 

concern and others raised with regard to 

proposed 9A619.c, BIS is revising 

9A619.c and adding two new 

paragraphs .d and .e. 9A619.c controls 

hot section components (i.e., 

combustion chambers and liners; high 

pressure turbine blades, vanes, disks 

and related cooled structure; cooled low 

pressure turbine blades, vanes, disks 

and related cooled structure; cooled 

augmenters; and cooled nozzles) 

‘‘specially designed’’ for gas turbine 

engines controlled in 9A619.a. ECCN 

9A619.d controls uncooled turbine 

blades, vanes, disks, and shrouds 

‘‘specially designed’’ for gas turbine 

engines controlled in 9A619.a. ECCN 

9A619.e controls combustor cowls, 

diffusers, domes, and shells ‘‘specially 

designed’’ for gas turbine engines 

controlled in 9A619.a. Engine 

monitoring systems previously 

proposed for control under 9A619.d are 

being redesignated as 9A619.f. 

One commenter stated that 9A619.d 

(now redesignated as 9A619.f) should 

include a definition for ‘‘engine 

monitoring systems’’ controlled under 

that entry. BIS does not accept this 

recommendation. Engine monitoring 

systems are intended to reflect industry 

standard terminology. BIS is, however, 

clarifying the parenthetical description 

in this entry to better identify those 

engine monitoring systems controlled 

under this ECCN. 

One commenter recommended that 

pressure sensors, thermocouples, and 

wire-harnesses should be considered as 

parts and components excluded from 

the ‘‘specially designed’’ definition. 

Alternatively, if not excluded, then the 

commenter stated that such items 

should be controlled under ECCN 

9A619.y. In addition, the commenter 

recommended that speed sensors, 

actuators, electro-hydraulic servo 

valves, fuel flow meters, fuel filters, oil 

filters, air actuated control valves, and 

fuel actuated control valves also be 

controlled under 9A619.y. BIS has 

determined that such items do not, in 

all cases, meet the standards for being 

controlled in a .y control. Thus, to the 

extent they are ‘‘specially designed’’ for 

a military aircraft engine controlled in 

either 9A619.a or USML Category 

XIX(a), they would be controlled by 

9A619.x. BIS notes that this control is 

materially different than these items’ 

current controls in USML Category 

VIII(h) and that it substantially furthers 

the national security and defense 

industrial base objectives described 

above. 

4. Additional Changes Made to ECCN 

9A619 

BIS is also amending ECCN 9A619 to 

make conforming changes due to the 

finalization of certain proposed rules 

published after the December 6 (gas 

turbine engines) rule. The Related 

Controls paragraph is amended to reflect 

the revised de minimis level for ‘‘600 

series’’ items, as proposed in the June 21 

(transition) rule and finalized in this 

rule. In addition, references using the 

defined term ‘‘accessories and 

attachments’’ have been changed to 

‘‘accessories’’ and ‘‘attachments’’ to 

reflect the separation of those defined 

terms, as proposed in the June 19 

‘‘specially designed’’ rule and finalized 

in this rule. Finally, the word 

‘‘paragraphs’’ has been removed from 

9A619.a, and the note to 9A619.a has 

been amended to reflect the current 

status of the reform initiative. BIS has 

not yet published final rules that would 

create ECCNs 0A606 or 8A609 for 

vehicles and vessels, respectively. 

Consequently, BIS is revising the note to 

make clear that those ECCNs are still 

proposed and do not currently exist in 

the EAR. 

BIS is clarifying that 9A619.d applies 

to ‘‘tip shrouds’’ rather than just 

‘‘shrouds.’’ Also, BIS has added the 

phrase ‘‘mechanical properties’’ to the 

forgings and castings notes to 9A619.e 

and 9A619.x because there may be 

circumstances when the mechanical 

properties, as well as the material 

composition, geometry or function, of a 

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forging, casting, or unfinished product 

may have been altered specifically for a 

9A619.x part or component. BIS 

believes that the omission of 

‘‘mechanical properties’’ from the list 

proposed in the December 6 (gas turbine 

engines) rule was an error, and it is 

being corrected in this rule. 

5. Comments Regarding ECCNs 9B619 

and 9C619 

One commenter stated that the Unit 

paragraphs in the List of Items 

Controlled sections of ECCNs 9B619 and 

9C619 should contain a unit of measure 

and recommended that ‘‘$ value’’ be 

used. BIS concurs with the comment, 

and ECCNs 9B619 and 9C619 have been 

revised accordingly. 

One commenter recommended that 

ECCN 9B619.y be revised to apply to 

specific test, inspection, and production 

equipment ‘‘specially designed’’ for the 

‘‘production’’ or ‘‘development’’ of 

commodities enumerated in 9A619.y, 

rather than 9A619. BIS does not accept 

this recommendation as items 

specifically enumerated in the .y 

paragraph of 9B619 are not intended to 

be limited to those items ‘‘specially 

designed’’ for the ‘‘production’’ or 

‘‘development’’ of items identified in 

the .y paragraph of 9A619. 

6. Additional Changes Made to ECCNs 

9B619 and 9C619 

BIS is also amending ECCNs 9B619 

and 9C619 to make the following 

conforming changes due to the 

finalization of certain proposed rules 

published after the December 6 (gas 

turbine engines) rule. The Related 

Controls paragraph of 9C619 is amended 

to reflect the revised de minimis levels 

for ‘‘600 series’’ items, as proposed in 

the June 21 (transition) rule and 

finalized in this rule. In addition, 

references in 9B619 using the defined 

term ‘‘accessories and attachments’’ 

have been changed to ‘‘accessories’’ and 

‘‘attachments’’ to reflect the separation 

of those defined terms, as proposed in 

the June 19 (specially designed) rule 

and finalized in this rule. 

7. Comments Regarding ECCNs 9D619, 

9E619, and Availability of License 

Exceptions STA and GOV 

One commenter raised concerns with 

the wording used in the Related 

Controls paragraphs of ECCNs 9D619 

and 9E619. The December 6 (gas turbine 

engines) rule provides a reference for 

technical data or software directly 

related to articles enumerated in 

proposed USML Category XIX. Rather 

than using ‘‘directly related to,’’ the 

commenter proposed using ‘‘ ‘required’ 

to achieve the military functionality.’’ 

BIS does not accept this 

recommendation as this wording was 

intended to track the text of proposed 

USML Category XIX(g). Interpreting 

‘‘directly related to’’ in Category XIX(g) 

is an issue for the ITAR and not the 

EAR. 

For the NS and RS controls in ECCN 

9E619, one commenter recommended 

that ‘‘9D619.y’’ be added to the list of 

9Y619 items that are excepted from the 

NS or RS control. BIS accepts this 

recommendation, and 9E619 has been 

revised accordingly to make this 

correction. In addition, BIS has inserted 

the word ‘‘software’’ to the description 

of items excepted from the NS or RS 

control. 

One commenter stated in response to 

the December 6 (gas turbine engines) 

rule that the proposed Supplement No. 

4 to part 740 would create such 

complexity that exporters would seek 

licenses to avoid determining whether 

License Exceptions STA and GOV are 

available. The commenter further noted 

the complexity in having two separate 

restrictions varying with respect to 

‘‘build-to-print technology’’ in proposed 

paragraphs (b)(1) and (b)(2) in that 

supplement. 

BIS understands concerns with the 

complexity in navigating the proposed 

rule to determine if License Exception 

STA and portions of License Exception 

GOV are available for software and 

technology related to military gas 

turbine engines. However, BIS believes 

drawing such distinctions in availability 

to use STA and GOV is necessary to 

allow those license exceptions to be 

used for some portion of the software 

and technology at issue. Otherwise, 

drawing a brighter line could result in 

no software and technology related to 

military gas turbine engines being 

eligible for License Exceptions STA and 

portions of License Exception GOV. 

However, as discussed previously, BIS 

is removing proposed Supplement No. 4 

to part 740, which will leave the 

majority of the information necessary to 

determine whether STA and portions of 

GOV are available to the applicable 

‘‘600 series’’ ECCN. In this case, ECCN 

9D619 has been revised to move the list 

of items in (b)(1)(i) through (ix) and 

(b)(2)(i) through (vii) in Supplement No. 

4 to part 740 to 9D619.b. Thus, 9D619.b 

would control software ‘‘specially 

designed’’ for the ‘‘development’’ or 

‘‘production’’ of the items previously 

described in (b)(1)(i) through (ix) and 

(b)(2)(i) through (vii) of Supplement No. 

4 to part 740. The STA paragraph in the 

License Exceptions section of the ECCN 

has been revised to read that paragraphs 

(c)(1) and (c)(2) of STA may not be used 

for 9D619.b, and the License Exceptions 

Note has been removed. Paragraph (c)(1) 

of STA would still be available for 

9D619.a software. Similar text with 

respect to use of GOV for 9D619 has also 

been added to § 740.11. It is important 

to note that the revisions to 9D619 do 

not substantively change the license 

requirements proposed in the December 

6 (gas turbine engines) rule. Therefore, 

the reasons for control have been 

revised to reflect the changes to the 

Items paragraph, and a parenthetical has 

been added to 9D619.a to exclude 

software in 9D619.b from 9D619.a. 

In addition, ECCN 9E619 has been 

revised to move the list of items in 

(b)(1)(i) through (ix) in Supplement No. 

4 to part 740 to Items paragraph .b. 

Thus, 9E619.b would control 

technology, other than ‘‘build-to-print 

technology,’’ ‘‘required’’ for the 

‘‘development’’ or ‘‘production’’ of the 

items previously described in (b)(1)(i) 

through (ix) of Supplement No. 4. As 

reflected in the new note after Items 

paragraph .a, ‘‘build-to-print 

technology’’ ‘‘required’’ for the 

‘‘production’’ of items described in 

paragraphs .b.1 through b.9 in 9E619 is 

classified under 9E619.a. To correspond 

to this change, the STA paragraph in the 

License Exceptions section is revised to 

read that paragraph (c)(1) of STA may 

not be used for 9E619.b. This revision 

does not prohibit the use of paragraph 

(c)(1) of STA for 9E619.a, which 

includes ‘‘build-to-print technology’’ for 

items described in 9E619.b.1 through 

b.9. 

Further, BIS is moving the items 

previously described in paragraphs 

(b)(2)(i) through (vii) of Supplement No. 

4 to part 740 to Items paragraph .c. 

Thus, 9E619.c would control technology 

required for the ‘‘development’’ or 

‘‘production’’ of any of the items 

previously in (b)(2)(i) through (vii) of 

Supplement No. 4. To correspond to 

this change, the STA paragraph in the 

License Exceptions section of 9E619 has 

been revised to read that paragraph 

(c)(1) of STA may be used with 

technology in 9E619.c, which includes 

‘‘build-to-print technology.’’ BIS has 

also revised the STA paragraph to 

provide that paragraph (c)(2) of STA is 

not available any technology controlled 

in 9E619. 

As with 9D619, these revisions to 

9E619 do not substantively change the 

license requirements proposed in the 

December 6 (gas turbine engines) rule. 

As a result, the reasons for control have 

been revised to reflect the changes to the 

Items paragraph, and a parenthetical has 

been added to 9E619.a to exclude 

technology in 9E619.b and .c from 

falling under 9E619.a. 

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BIS also received comments raising 

concerns over the software and 

technology in ECCNs 9D619 and 9E619 

that were proposed to be subject to the 

restrictions described in proposed 

Supplement No. 4 to part 740. One 

commenter stated that the same 

restrictions imposed on significant 

military equipment under the ITAR 

should not be imposed on items not 

deemed to be of substantial military 

utility or capability when controlled as 

‘‘600 series’’ items on the CCL. As a 

result, the items identified in 

paragraphs (b)(2)(i) through (iii) and 

(b)(2)(vii) of Supplement No. 4 to part 

740 should be moved to paragraph (b)(1) 

of Supplement No. 4, which would 

make ‘‘build-to-print technology’’ for 

such items eligible for License 

Exceptions STA and GOV. BIS does not 

accept this recommendation. Based on 

the results of the Defense Departmentled review of the USML, it was 

determined that the software or 

technology used to produce or develop 

some types of parts and components is 

more sensitive than the finished parts 

and components themselves. 

Rather than splitting the jurisdiction 

between the technology (as ITAR 

controlled) and the parts and 

components (as EAR controlled), BIS 

decided to keep the jurisdictional status 

the same but to impose ITAR-like 

worldwide licensing obligations on the 

technology. This approach satisfies the 

Government’s objective of having 

visibility in to the export of such 

technology even for use by close allies 

while allowing for the more efficient 

flow of parts and components to close 

allies and the industry’s objective of a 

control structure where both the 

parts/components and related 

technology are subject to the same set of 

regulations. 

One commenter stated that 

development and production software 

and technology for items described in 

paragraph (b)(2) of Supplement No. 4 to 

part 740 are similar to, and in some 

cases, less sophisticated than 

commercial production and 

development software and technology 

for the commercial equivalents of such 

items, which would be classified under 

ECCNs 9E003 or 9E991. Consequently, 

the commenter recommended that 

‘‘build-to-print technology’’ be 

authorized under STA for all parts 

classified under 9A619.x for engines 

classified under 9A619.a. BIS rejects 

this suggestion. The controls are 

warranted because, by definition, the 

engines and parts at issue are ‘‘specially 

designed’’ for military aircraft. As such, 

they warrant control regardless of 

whether they are more or less 

sophisticated than their purely civil 

counterparts. 

8. Additional Changes Made to ECCNs 

9D619 and 9E619 

BIS is clarifying that 9D619 and 

9E619 control software and technology, 

respectively, for the development of 

production of ‘‘tip shrouds’’ rather than 

just ‘‘shrouds.’’ Further, BIS is removing 

the Note to 9D619 and Note to 9E619 

because BIS added Supplement No.4 to 

part 774 for the CCL order of review, 

which more clearly addresses the 

concept outlined in those notes. Also, 

BIS is amending ECCNs 9D619 and 

9E619 to make conforming changes due 

to finalization of certain proposed rules 

published after the December 6 (gas 

turbine engines) rule. The Related 

Controls paragraph of 9D619 is 

amended to reflect the revised de 

minimis levels for ‘‘600 series’’ items, as 

proposed in the June 21 (transition) rule 

and finalized in this rule. The Related 

Controls paragraph of 9E619 is also 

revised to remove the reference to ECCN 

0A919 foreign-made ‘‘military 

commodities’’ because technology 

would not be considered in conducting 

a de minimis calculation for a 

commodity. Also, to improve clarity, 

9D619.y.1 and y.2 are merged into 

9D619.y, and 9E619.y.1 and y.2 are 

merged into 9E619.y. Finally, the 

wording used in ECCNs 9D619.b.15 and 

9E619.c.6 has been revised slightly to 

parallel the wording used in State’s 

revised USML Category XIX(e), as 

published April 16, 2013, to read 

‘‘[d]igital engine control systems’’ rather 

than ‘‘[d]igital engine controls.’’ 

E. 9Y018 ECCNs Rolled Into ‘‘600 

Series’’ 

Consistent with the regulatory 

construct identified in the July 15 

(framework) rule (i.e., to move items 

from 018 ECCNs to the appropriate ‘‘600 

series’’ ECCNs in order to consolidate 

the WAML and former USML items into 

one series of ECCNs), this rule moves 

aircraft, refuelers, ground equipment, 

parachutes, harnesses, and instrument 

flight trainers, as well as parts and 

accessories and attachments for the 

forgoing that, prior to the effective date 

of this final rule, were controlled under 

ECCN 9A018.a.1, .a.3, .c, .d, .e, or .f to 

new ‘‘600 series’’ ECCN 9A610. In 

addition, this rule moves military 

trainer aircraft turbo prop engines and 

parts and components therefor that were 

controlled under ECCN 9A018.a.2 or 

.a.3 to new ‘‘600 series’’ ECCN 9A619. 

ECCN 9A018.a is removed and reserved 

and references to 9A018.a are removed 

from the Regional Stability license 

requirement paragraph of ECCNs 9A018, 

9D018 and 9E018. In addition, this rule 

removes the sentence about parachute 

systems in the Related Definition 

paragraph of 9A018. Related ‘‘software’’ 

and ‘‘technology’’ that were controlled 

under ECCNs 9D018 and 9E018, are 

now controlled under new ‘‘600 series’’ 

ECCNs 9D610, 9D619, 9E610, and 

9E619. 

Furthermore, consistent with the July 

15 (framework) rule’s statement that 018 

entries would remain in the CCL for a 

time, but only for cross-reference 

purposes, this rule amends the Related 

Controls paragraphs in ECCNs 9A018, 

9D018, and 9E018 to include references 

to the new ‘‘600 series’’ ECCNs 

indicated above. Specifically, the 

Related Controls paragraph in ECCN 

9A018 refers to ECCN 9A610, for 

commodities previously controlled 

under ECCN 9A018.a.1, .a.3, .c, .d, .e, 

and .f, and to ECCN 9A619, for 

commodities previously controlled 

under ECCN 9A018.a.2 or .a.3. 

Similarly, ECCN 9D018 refers to new 

ECCNs 9D610 and 9D619 for related 

‘‘software,’’ and ECCN 9E018 refers to 

ECCNs 9E610 and 9E619 for related 

‘‘technology.’’ 

However, ground vehicles in ECCN 

9A018 that would be moved to new 

‘‘600 series’’ ECCN 0A606 under a 

proposed rule that BIS published on 

December 6, 2011 (76 FR 76085), will 

continue to be controlled under ECCN 

9A018.b until BIS publishes the final 

rule that would add new ‘‘600 series’’ 

ECCNs 0A606, 0B606, 0C606, 0D606 

and 0E606 to the CCL to control articles 

the President determines no longer 

warrant control under Category VII 

(military vehicles and related articles) of 

the USML. In addition, related 

‘‘software’’ and ‘‘technology’’ for these 

ground vehicles will continue to be 

controlled under ECCNs 9D018 and 

9E018, respectively, until BIS publishes 

the final rule that adds the 0x606 ECCNs 

to the CCL. 

F. Supplement Nos. 6 and 7—Sensitive 

List and Very Sensitive List 

The June 21 (transition) rule proposed 

adding new Supplement Nos. 6 and 7, 

the Sensitive List and the Very Sensitive 

List, respectively, to the Commerce 

Control List. These lists are referenced 

in License Exception GOV (§ 740.11) 

and Wassenaar Arrangement reporting 

requirements (part 743). As explained in 

the June 21 (transition) rule, these lists 

replace the list of items previously set 

forth in Supplement No. 1 to § 740.11. 

While the items on the lists are 

identified by ECCN rather than by 

Wassenaar Arrangement numbering, the 

item descriptions are drawn directly 

from the Wassenaar Arrangement. 

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Two commenters recommended 

removing the titles for Supplement Nos. 

6 and 7 and only referencing these 

supplements by location in the EAR, 

because they thought it was confusing to 

use the same titles that are used in 

Wassenaar Arrangement’s List of Dualuse Goods and Technologies and 

Munitions List, but not to use the same 

numbering system. BIS does not accept 

this recommendation, because removing 

the titles makes the purpose of the lists 

less clear to the public. The titles and 

explanations in the notes at the start of 

each list provide valuable information 

about the source of the lists, the relation 

of the items to national security 

controls, the organizational body that 

makes changes to the list, and, for those 

familiar with the Wassenaar 

Arrangement, provide a context for how 

changes are made and generally when to 

expect changes to be made to the lists. 

Therefore, this rule implements, 

without change from the June 21 

(transition) rule proposal, the addition 

of Supplement Nos. 6 and 7, the 

Sensitive List and the Very Sensitive 

List, respectively. The version of 

Supplement No. 6 contained in this 

final rule is modified from that 

published in the June 21 (transition) 

rule to reflect revisions to the Sensitive 

List agreed to by the Wassenaar 

Arrangement members subsequent to 

publication of that proposed rule. 

G. Supplement No. 4—Commerce 

Control List Order of Review 

This final rule is adding a new 

Supplement No. 4 to part 774— 

Commerce Control List Order of Review. 

A different Supplement No. 4 to part 

774 listing ‘‘600 series’’ items eligible 

for License Exception STA was 

proposed in the November 7 (aircraft) 

rule. BIS elected to incorporate 

information on STA eligibility into the 

relevant ECCN rather than create a 

Supplement. 

This new supplement will provide the 

public with guidance on the steps that 

are to be taken (i.e., the order of review) 

when reviewing the CCL, in light of the 

new ‘‘600 series’’ and the new definition 

of ‘‘specially designed’’ also being 

added in this final rule. This new 

supplement also clarifies the existing 

policy in regards to the ITAR taking 

precedence over the EAR and how the 

‘‘600 series’’ takes precedence over the 

rest of the CCL in terms of the order of 

review when reviewing the CCL for 

items that are ‘‘subject to the EAR.’’ This 

new supplement will clearly identify 

the steps the public should follow to 

classify items on the CCL. As described 

above under the changes to part 738, a 

new cross reference is also being added 

to § 738.2 paragraph (c) to direct the 

public to this new supplement. 

XXV. Procedural Amendment— 

Authority Citation Update 

This rule revises the authority citation 

paragraphs for parts 730, 734, 743, and 

750 of the EAR to cite Executive Order 

13637 of March 8, 2013 (78 FR 16129, 

March 13, 2013). That executive order 

provided authority underlying the 

issuance of licenses for items that are 

subject to the EAR by DDTC and 

directed the Secretary of Commerce to 

develop procedures for notifying 

Congress of certain exports. Parts 730, 

734, 743, and 750 address the issuance 

of licenses by DDTC and Congressional 

notifications. Adding this citation to the 

EAR authority citation paragraphs is a 

purely procedural action to keep 

authority citations listed the Code of 

Federal Regulations accurate and 

current. It does not alter any right, 

obligation or prohibition that applies to 

any person under the EAR. 

Although the Export Administration 

Act expired on August 20, 2001, the 

President, through Executive Order 

13222 of August 17, 2001, 3 CFR, 2001 

Comp., p. 783 (2002), as amended by 

Executive Order 13637 of March 8, 

2013, 78 FR 16129 (March 13, 2013) and 

as extended by the Notice of August 15, 

2012, 77 FR 49699 (August 16, 2012), 

has continued the Export 

Administration Regulations in effect 

under the International Emergency 

Economic Powers Act. BIS continues to 

carry out the provisions of the Export 

Administration Act, as appropriate and 

to the extent permitted by law, pursuant 

to Executive Order 13222. 

Regulatory Requirements 

1. Executive Orders 13563 and 12866 

direct agencies to assess all costs and 

benefits of available regulatory 

alternatives and, if regulation is 

necessary, to select regulatory 

approaches that maximize net benefits 

(including potential economic, 

environmental, public health and safety 

effects, distribute impacts, and equity). 

Executive Order 13563 emphasizes the 

importance of quantifying both costs 

and benefits, of reducing costs, of 

harmonizing rules, and of promoting 

flexibility. This rule has been 

designated a ‘‘significant regulatory 

action,’’ although not economically 

significant, under section 3(f) of 

Executive Order 12866. Accordingly, 

the rule has been reviewed by the Office 

of Management and Budget (OMB). 

2. Notwithstanding any other 

provision of law, no person is required 

to respond to, nor is subject to a penalty 

for failure to comply with, a collection 

of information, subject to the 

requirements of the Paperwork 

Reduction Act of 1995 (44 U.S.C. 3501 

et seq.) (PRA), unless that collection of 

information displays a currently valid 

OMB control number. This final rule 

would affect the following approved 

collections: Simplified Network 

Application Processing System (control 

number 0694–0088), which includes, 

among other things, license 

applications; license exceptions (0694– 

0137); voluntary self-disclosure of 

violations (0694–0058); recordkeeping 

(0694–0096); export clearance (0694– 

0122); and the Automated Export 

System (0607–0152). 

As stated in the July 15 (framework) 

rule, BIS believed that the combined 

effect of all rules to be published adding 

items to the EAR that would be removed 

from the ITAR as part of the 

administration’s Export Control Reform 

Initiative would increase the number of 

license applications to be submitted to 

BIS by approximately 16,000 annually. 

As the review of the USML progressed, 

the interagency group gained more 

specific information about the number 

of items that would come under BIS 

jurisdiction. As of the June 21 

(transition) rule, BIS estimated the 

increase in license applications to be 

30,000 annually, resulting in an increase 

in burden hours of 8,500 (30,000 

transactions at 17 minutes each) under 

control number 0694–0088. BIS 

continues to review its estimate of this 

level of increase as more information 

becomes available. As described below, 

the net burden U.S. export controls 

impose on U.S. exporters will go down 

as a result of the transfer of less 

sensitive military items to the 

jurisdiction of the CCL and the 

application of the license exceptions 

and other provisions set forth in this 

rule. 

Some items formerly on the USML 

will become eligible for License 

Exception STA under this rule. Other 

such items may become eligible for 

License Exception STA upon approval 

of an eligibility request. BIS believes 

that the increased use of License 

Exception STA resulting from the 

combined effect of all rules to be 

published adding items to the EAR that 

would be removed from the ITAR as 

part of the administration’s Export 

Control Reform Initiative would 

increase the burden associated with 

control number 0694–0137 by about 

14,758 hours (12,650 transactions at 1 

hour and 10 minutes each). 

BIS expects that this increase in 

burden would be more than offset by a 

reduction in burden hours associated 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22705 

with approved collections related to the 

ITAR. 

3. This rule does not contain policies 

with Federalism implications as that 

term is defined under E.O. 13132. 

4. The Regulatory Flexibility Act 

(RFA), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA), 5 U.S.C. 

601 et seq., generally requires an agency 

to prepare a regulatory flexibility 

analysis of any rule subject to the notice 

and comment rulemaking requirements 

under the Administrative Procedure Act 

(5 U.S.C. 553) or any other statute, 

unless the agency certifies that the rule 

will not have a significant economic 

impact on a substantial number of small 

entities. Under section 605(b) of the 

RFA, however, if the head of an agency 

certifies that a rule will not have a 

significant impact on a substantial 

number of small entities, the statute 

does not require the agency to prepare 

a regulatory flexibility analysis. 

Pursuant to section 605(b), the Chief 

Counsel for Regulation, Department of 

Commerce, certified to the Chief 

Counsel for Advocacy, Small Business 

Administration that the following 

proposed rules will not have a 

significant impact on a substantial 

number of small entities for the reasons 

explained below: the July 15 

(framework) rule, November 7 (aircraft) 

rule, December 6 (gas turbine engines) 

rule, June 19 (specially designed) rule, 

and June 21 (transition) rule, if 

promulgated. Summaries of the factual 

basis for the certification were provided 

in the respective proposed rules that are 

being finalized in this rule and are not 

repeated here. No comments were 

received regarding the economic impact 

of this final rule. Consequently, BIS has 

not prepared a regulatory flexibility 

analysis. 

List of Subjects 

15 CFR Part 730 

Administrative practice and 

procedure, Advisory committees, 

Exports, Reporting and recordkeeping 

requirements, Strategic and critical 

materials. 

15 CFR Parts 732, 740, 748, 750 and 758 

Administrative practice and 

procedure, Exports, Reporting and 

recordkeeping requirements. 

15 CFR Part 734 

Administrative practice and 

procedure, Exports, Inventions and 

patents, Research science and 

technology. 

15 CFR Parts 736, 738, 770 and 772 

Exports. 

15 CFR Part 742 

Exports, Terrorism. 

15 CFR Part 743 

Administrative practice and 

procedure, Reporting and recordkeeping 

requirements. 

15 CFR Part 744 

Exports, Reporting and recordkeeping 

requirements, Terrorism. 

15 CFR Parts 746 and 774 

Exports, Reporting and recordkeeping 

requirements. 

15 CFR Part 756 

Administrative practice and 

procedure, Exports, Penalties. 

15 CFR Part 762 

Administrative practice and 

procedure, Business and industry, 

Confidential business information, 

Exports, Reporting and recordkeeping 

requirements. 

15 CFR Part 764 

Administrative practice and 

procedure, Exports, Law enforcement, 

Penalties. 

For the reasons stated in the 

preamble, the Export Administration 

Regulations (15 CFR parts 730 through 

774) are amended as follows: 

PART 730—[AMENDED] 

■ 1. The authority citation for 15 CFR 

part 730 is revised to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 

7430(e); 22 U.S.C. 287c; 22 U.S.C. 2151 note; 

22 U.S.C. 3201 et seq.; 22 U.S.C. 6004; 30 

U.S.C. 185(s), 185(u); 42 U.S.C. 2139a; 42 

U.S.C. 6212; 43 U.S.C. 1354; 15 U.S.C. 1824a; 

50 U.S.C. app. 5; 22 U.S.C. 7201 et seq.; 22 

U.S.C. 7210; E.O. 11912, 41 FR 15825, 3 CFR, 

1976 Comp., p. 114; E.O. 12002, 42 FR 35623, 

3 CFR, 1977 Comp., p. 133; E.O. 12058, 43 

FR 20947, 3 CFR, 1978 Comp., p. 179; E.O. 

12214, 45 FR 29783, 3 CFR, 1980 Comp., p. 

256; E.O. 12851, 58 FR 33181, 3 CFR, 1993 

Comp., p. 608; E.O. 12854, 58 FR 36587, 3 

CFR, 1993 Comp., p. 179; E.O. 12918, 59 FR 

28205, 3 CFR, 1994 Comp., p. 899; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950; E.O. 12947, 60 FR 5079, 3 CFR, 1995 

Comp., p. 356; E.O. 12981, 60 FR 62981, 3 

CFR, 1995 Comp., p. 419; E.O. 13020, 61 FR 

54079, 3 CFR, 1996 Comp., p. 219; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13099, 63 FR 45167, 3 CFR, 1998 

Comp., p. 208; E.O. 13222, 66 FR 44025, 3 

CFR, 2001 Comp., p. 783; E.O. 13224, 66 FR 

49079, 3 CFR, 2001 Comp., p. 786; E.O. 

13338, 69 FR 26751, 3 CFR, 2004 Comp., p. 

168; E.O. 13637 of March 8, 2013, 78 FR 

16129 (March 13, 2013); Notice of January 19, 

2012, 77 FR 3067 (January 20, 2012); Notice 

of May 9, 2012, 77 FR 27559 (May 10, 2012); 

Notice of August 15, 2012, 77 FR 49699 

(August 16, 2012); Notice of September 11, 

2012, 77 FR 56519 (September 12, 2012); 

Notice of November 1, 2012, 77 FR 66513 

(November 5, 2012). 

■ 2. Section 730.3 is revised to read as 

follows: 

§ 730.3 ‘‘Dual use’’ and other Types of 

Items Subject to the EAR. 

The term ‘‘dual use’’ is often used to 

describe the types of items subject to the 

EAR. A ‘‘dual-use’’ item is one that has 

civil applications as well as terrorism 

and military or weapons of mass 

destruction (WMD)-related applications. 

The precise description of what is 

‘‘subject to the EAR’’ is in § 734.3, 

which does not limit the EAR to 

controlling only dual-use items. In 

essence, the EAR control any item 

warranting control that is not 

exclusively controlled for export, 

reexport, or transfer (in-country) by 

another agency of the U.S. Government 

or otherwise excluded from being 

subject to the EAR pursuant to 

§ 734.3(b) of the EAR. Thus, items 

subject to the EAR include purely 

civilian items, items with both civil and 

military, terrorism or potential WMDrelated applications, and items that are 

exclusively used for military 

applications but that do not warrant 

control under the International Traffic 

in Arms Regulations (ITAR) (22 CFR 

parts 120 et seq.). 

■ 3. Section 730.6 is amended by 

revising the first and second sentences 

to read as follows: 

§ 730.6 Control purposes. 

The export control provisions of the 

EAR are intended to serve the national 

security, foreign policy, 

nonproliferation of weapons of mass 

destruction, and other interests of the 

United States, which in many cases are 

reflected in international obligations or 

arrangements. Some controls are 

designed to restrict access to items 

subject to the EAR by countries or 

persons that might apply such items to 

uses inimical to U.S. interests. * * * 

PART 732—[AMENDED] 

■ 4. The authority citation for 15 CFR 

part 732 continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 

of August 15, 2012, 77 FR 49699 (August 16, 

2012). 

■ 5. Section 732.1 is amended by adding 

paragraph (a)(3) to read as follows: 

§ 732.1 Steps overview. 

(a) * * * 

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(3) The general information in this 

part is intended to provide an overview 

of the steps to be taken for certain 

requirements in the EAR, though not all 

of them. Nothing in this part shall be 

construed as altering or affecting any 

other authority, regulation, investigation 

or other enforcement measure provided 

by or established under any other 

provision of federal law, including 

provisions of the EAR. 

* * * * * 

■ 6. Section 732.2 is amended by 

revising paragraph (f) to read as follows: 

§ 732.2 Steps regarding the scope of the 

EAR. 

* * * * * 

(f) Step 6: Direct product rule. Foreign 

items that are the direct product of U.S. 

technology, software, or plant or major 

component of a plant made from U.S. 

technology or software may be subject to 

the EAR if they meet the conditions of 

General Prohibition Three in 

§ 736.2(b)(3) of the EAR. Direct products 

that are subject to the EAR may require 

a license to be exported from abroad or 

reexported to certain countries. 

(1) Subject to the EAR. If your foreign 

item is captured by the direct product 

rule (General Prohibition Three), then 

the item is subject to the EAR and its 

export from abroad or reexport may 

require a license. You should next 

consider the steps regarding all other 

general prohibitions, license exceptions, 

and other requirements. If the item is 

not captured by General Prohibition 

Three, then you have completed the 

steps necessary to determine whether 

the item is subject to the EAR, and you 

may skip the remaining steps. As 

described in part 734 of the EAR, items 

outside the U.S. are subject to the EAR 

when they are: 

(i) U.S.-origin commodities, software, 

or technology, unless controlled for 

export exclusively by another U.S. 

Federal agency or unless publicly 

available; 

(ii) Foreign-origin commodities, 

software, or technology that are within 

the scope of General Prohibition Two 

(De minimis rules), or General 

Prohibition Three (Direct Product rule). 

However, such foreign-origin items are 

also outside the scope of the EAR if they 

are controlled for export exclusively by 

another U.S. Federal Agency or, if 

technology or software, are publicly 

available as described in paragraph (b) 

of this section. 

(2) [Reserved] 

* * * * * 

■ 7. Section 732.3 is amended by 

revising paragraphs (b)(1) and (f), to 

read as follows: 

§ 732.3 Steps regarding the ten general 

prohibitions. 

* * * * * 

(b) * * * 

(1) You should classify your items 

‘‘subject to the EAR’’ in the relevant 

entry on the CCL, and you may do so 

on your own without BIS assistance. 

The CCL includes a Supplement No. 4 

to part 774—Commerce Control List 

Order of Review. This supplement 

establishes the steps (i.e., the order of 

review) that should be followed in 

classifying items that are ‘‘subject to the 

EAR.’’ The exporter, reexporter, or 

transferor is responsible for correctly 

classifying the items in a transaction, 

which may involve submitting a 

classification request to BIS. Failure to 

classify or have classified the item 

correctly does not relieve the person of 

the obligation to obtain a license when 

one is required by the EAR. 

* * * * * 

(f) Step 11: Direct product rule— 

General Prohibition Three. Items located 

outside the U.S. that are also produced 

outside the U.S. from U.S. technology or 

software or a plant or major component 

of a plant made from U.S. technology or 

software may be subject to the EAR if 

they meet the conditions of General 

Prohibition Three in § 736.2(b)(3) of the 

EAR. Direct products that are subject to 

the EAR may require a license to be 

exported from abroad or reexported to 

specified countries. If your foreign item 

is captured by the direct product rule 

(General Prohibition Three), then your 

export from abroad or reexport is subject 

to the EAR. You should next consider 

the steps regarding all other general 

prohibitions, license exceptions, and 

other requirements. If your item is not 

captured by General Prohibition Three, 

then your export from abroad or 

reexport is not subject to the EAR. You 

have completed the steps necessary to 

determine whether your transaction is 

subject to the EAR, and you may skip 

the remaining steps. 

* * * * * 

■ 8. Section 732.4 is amended by: 

■ a. Adding a sentence to the end of 

paragraph (b)(3)(iv); and 

■ b. Revising paragraph (b)(7). 

The addition and revision read as 

follows: 

§ 732.4 Steps regarding using License 

Exceptions. 

* * * * * 

(b) * * * 

(3) * * * 

(iv) * * * If you are exporting under 

License Exceptions LVS, TMP, RPL, 

STA, or GOV and your item is classified 

in the ‘‘600 series,’’ you should review 

§ 743.4 of the EAR to determine the 

applicability of certain reporting 

requirements for conventional arms 

exports. 

* * * * * 

(7) Step 26: License applications. (i) If 

you are going to file a license 

application with BIS, you should first 

review the requirements in part 748 of 

the EAR. Exporters, reexporters, and 

transferors should review the 

instructions concerning applications 

and required support documents prior 

to submitting an application for a 

license. 

(ii) If you are going to file a license 

application with BIS for the export, 

reexport or in-country transfer for an 

aircraft controlled under ECCNs 

9A610.a, § 740.20(g) permits you to 

request in the application that 

subsequent exports of the type of 

aircraft at issue be eligible for export 

under License Exception STA. The 

types of aircraft controlled under ECCN 

9A610.a that have been determined to 

be eligible for License Exception STA 

pursuant to § 740.20(g) are identified in 

the License Exceptions paragraph of 

ECCN 9A610. Supplement No. 2 to part 

748, paragraph (w) (License Exception 

STA eligibility requests), contains the 

instructions for such applications. 

Note to paragraph (b)(7)(ii): If you intend 

to use License Exception STA, return to 

paragraphs (a) and then (b) of this section to 

review the Steps regarding the use of license 

exceptions. 

■ 9. Supplement No. 3 to part 732 is 

amended by adding paragraphs (b)13. 

and (b)14. to read as follows: 

Supplement No. 3 to Part 732—BIS’s 

‘‘Know Your Customer’’ Guidance and 

Red Flags 

* * * * * 

(b) * * * 

13. You receive an order for ‘‘parts’’ 

or ‘‘components’’ for an end item in the 

‘‘600 series.’’ The requested ‘‘parts’’ or 

‘‘components’’ may be eligible for 

License Exception STA, another 

authorization, or may not require a 

destination-based license requirement 

for the country in question. However, 

the requested ‘‘parts’’ or ‘‘components’’ 

would be sufficient to service one 

hundred of the ‘‘600 series’’ end items, 

but you ‘‘know’’ the country does not 

have those types of end items or only 

has two of those end items. 

14. The customer indicates or the 

facts pertaining to the proposed export 

suggest that a ‘‘600 series’’ item may be 

reexported to a destination listed in 

Country Group D:5 (see Supplement No. 

1 to part 740 of the EAR). 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22707 

PART 734—[AMENDED] 

■ 10. The authority citation for part 734 

is revised to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 12938, 59 FR 59099, 

3 CFR, 1994 Comp., p. 950; E.O. 13020, 61 

FR 54079, 3 CFR, 1996 Comp., p. 219; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; E.O. 13637 of March 8, 2013, 

78 FR 16129 (March 13, 2013); Notice of 

August 15, 2012, 77 FR 49699 (August 16, 

2012); Notice of November 1, 2012, 77 FR 

66513 (November 5, 2012). 

■ 11. Section 734.3 is amended by 

adding a note to paragraph (b)(1)(i) and 

paragraph (e) to read as follows: 

§ 734.3 Items subject to the EAR. 

* * * * * 

(b) * * * 

(1) * * * 

Note to paragraph (b)(1)(i): If a defense 

article or service is controlled by the U.S. 

Munitions List set forth in the International 

Traffic in Arms Regulations, its export and 

temporary import is regulated by the 

Department of State. The President has 

delegated the authority to control defense 

articles and services for purposes of 

permanent import to the Attorney General. 

The defense articles and services controlled 

by the Secretary of State and the Attorney 

General collectively comprise the U.S. 

Munitions List under the Arms Export 

Control Act (AECA). As the Attorney General 

exercises independent delegated authority to 

designate defense articles and services for 

purposes of permanent import controls, the 

permanent import control list administered 

by the Department of Justice has been 

separately labeled the U.S. Munitions Import 

List (27 CFR Part 447) to distinguish it from 

the list set out in the International Trade in 

Arms Regulations. In carrying out the 

functions delegated to the Attorney General 

pursuant to the AECA, the Attorney General 

shall be guided by the views of the Secretary 

of State on matters affecting world peace, and 

the external security and foreign policy of the 

United States. 

* * * * * 

(e) Items subject to the EAR may be 

exported, reexported, or transferred in 

country under licenses, agreements, or 

other approvals from the Department of 

State’s Directorate of Defense Trade 

Controls pursuant to §§ 120.5(b) and 

126.6(c) of the International Traffic in 

Arms Regulations (ITAR) (22 CFR 

120.5(b) and 126.6(c)). Exports, 

reexports, or in-country transfers not in 

accordance with the terms and 

conditions of a license, agreement, or 

other approval under § 120.5(b) of the 

ITAR requires separate authorization 

from BIS. Exports, reexports, or incountry transfers of items subject to the 

EAR under a Foreign Military Sales case 

that exceed the scope of § 126.6(c) of the 

ITAR or the scope of actions made by 

the Department of State’s Office of 

Regional Security and Arms Transfers 

require separate authorization from BIS. 

■ 12. Section 734.4 is amended by 

redesignating paragraph (a)(6) as 

paragraph (a)(7) and by adding a new 

paragraph (a)(6) to read as follows: 

§ 734.4 De minimis U.S. content. 

(a) * * * 

(6) There is no de minimis level for 

foreign-made items that incorporate 

U.S.-origin ‘‘600 series’’ items when 

destined for a country listed in Country 

Group D:5 of Supplement No. 1 to part 

740 of the EAR. 

* * * * * 

PART 736—[AMENDED] 

■ 13. The authority citation for part 736 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 2151 note; E.O. 

12938, 59 FR 59099, 3 CFR, 1994 Comp., p. 

950; E.O. 13020, 61 FR 54079, 3 CFR, 1996 

Comp., p. 219; E.O. 13026, 61 FR 58767, 3 

CFR, 1996 Comp., p. 228; E.O. 13222, 66 FR 

44025, 3 CFR, 2001 Comp., p. 783; E.O. 

13338, 69 FR 26751, 3 CFR, 2004 Comp., p. 

168; Notice of May 9, 2012, 77 FR 27559 

(May 10, 2012); Notice of August 15, 2012, 

77 FR 49699 (August 16, 2012); Notice of 

November 1, 2012, 77 FR 66513 (November 

5, 2012). 

■ 14. Section 736.2 is amended by 

revising paragraph (b)(3)(iii) and adding 

paragraphs (b)(3)(iv) through (vi) to read 

as follows: 

§ 736.2 General prohibitions and 

determination of applicability. 

* * * * * 

(b) * * * 

(3) * * * 

(iii) Additional country scope of 

prohibition for ‘‘600 series’’ items. You 

may not, except as provided in 

paragraphs (b)(3)(v) or (vi) of this 

section, reexport or export from abroad 

without a license any ‘‘600 series’’ item 

subject to the scope of this General 

Prohibition Three to a destination in 

Country Groups D:1, D:3, D:4, D:5 or E:1 

(See Supplement No.1 to part 740 of the 

EAR). 

(iv) Product scope of ‘‘600 series’’ 

items subject to this prohibition. This 

General Prohibition Three applies if a 

‘‘600 series’’ item meets either of the 

following conditions: 

(A) Conditions defining direct product 

of technology or software for ‘‘600 

series’’ items. Foreign-made ‘‘600 

series’’ items are subject to this General 

Prohibition Three if the foreign-made 

items meet both of the following 

conditions: 

(1) They are the direct product of 

technology or software that is in the 

‘‘600 series’’ as designated on the 

applicable ECCN of the Commerce 

Control List in part 774 of the EAR; and 

(2) They are in the ‘‘600 series’’ as 

designated on the applicable ECCN of 

the Commerce Control List in part 774 

of the EAR. 

(B) Conditions defining direct product 

of a plant for ‘‘600 series’’ items. 

Foreign-made ‘‘600 series’’ items are 

also subject to this General Prohibition 

Three if they are the direct product of 

a complete plant or any major 

component of a plant if both of the 

following conditions are met: 

(1) Such plant or component is the 

direct product of ‘‘600 series’’ 

technology or software as designated on 

the applicable ECCN of the Commerce 

Control List in part 774 of the EAR, and 

(2) Such foreign-made direct products 

of the plant or component are in the 

‘‘600 series’’ as designated on the 

applicable ECCN of the Commerce 

Control List in part 774 of the EAR. 

(v) ‘‘600 series’’ foreign-produced 

direct products of U.S. technology or 

software subject to this General 

Prohibition Three do not require a 

license for reexport or export from 

abroad to the new destination unless the 

same item, if exported from the U.S. to 

the new destination, would have been 

prohibited or made subject to a license 

requirement by part 742, 744, 746, or 

764 of the EAR. 

(vi) License Exceptions. Each license 

exception described in part 740 of the 

EAR supersedes this General 

Prohibition Three if all terms and 

conditions of a given exception are met 

and the restrictions in § 740.2 do not 

apply. 

* * * * * 

■ 15. Supplement No. 1 to part 736 is 

amended by adding General Order No. 

5, to read as follows: 

Supplement No. 1 to Part 736 General 

Orders 

* * * * * 

General Order No. 5 

General Order No. 5 of April 16, 2013; 

Authorization for Items the President 

Determines No Longer Warrant Control 

under the United States Munitions List 

(USML). 

(a) Continued use of DDTC approvals 

from the Department of State’s 

Directorate of Defense Trade Controls 

(DDTC) for items that become subject to 

the EAR. Items the President has 

determined no longer warrant control 

under the USML will become subject to 

the EAR as published final rules that 

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22708 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

transfer the items to the CCL become 

effective. DDTC licenses, agreements, or 

other approvals that contain items 

transitioning from the USML to the CCL 

and that are issued prior to the effective 

date of the final rule transferring such 

items to the CCL may continue to be 

used in accordance with the Department 

of State’s final rule, Amendments to the 

International Trade in Arms 

Regulations: Initial Implementation of 

Export Control Reform, published on 

April 16, 2013 in the Federal Register. 

(b) BIS authorization. 

(1) Where continued use of DDTC 

authorization is not or is no longer an 

available option, or a holder of an 

existing DDTC authorization returns or 

terminates that authorization, any 

required authorization to export, 

reexport, or transfer (in-country) a 

transitioned item on or after the 

effective date of the applicable final rule 

must be obtained under the EAR. 

Following the publication date and 

prior to the effective date of a final rule 

moving an item from the USML to the 

CCL, applicants may submit license 

applications to BIS for authorization to 

export, reexport, or transfer (in-country) 

the transitioning item. BIS will process 

the license applications in accordance 

with § 750.4 of the EAR, hold the 

license application without action 

(HWA) if necessary, and issue a license, 

if approved, to the applicant no sooner 

than the effective date of the final rule 

transitioning the items to the CCL. 

(2) Following the effective date of a 

final rule moving items from the USML 

to the CCL, exporters, reexporters, and 

transferors of such items may return 

DDTC licenses in accordance with 

§ 123.22 of the ITAR or terminate 

Technical Assistance Agreements, 

Manufacturing License Agreements, or 

Warehouse and Distribution Agreements 

in accordance with § 124.6 of the ITAR 

and thereafter export, reexport, or 

transfer (in-country) such items under 

applicable provisions of the EAR, 

including any applicable license 

requirements. No transfer (in-country) 

may be made of an item exported under 

a DDTC authorization containing 

provisos or other limitations without a 

license issued by BIS unless (i) the 

transfer (in-country) is authorized by an 

EAR license exception and the terms 

and conditions of the License Exception 

have been satisfied, or (ii) no license 

would otherwise be required under the 

EAR to export or reexport the item to 

the new end user. 

(c) Prior commodity jurisdiction 

determinations. If the U.S. State 

Department has previously determined 

that an item is not subject to the 

jurisdiction of the ITAR and the item 

was not listed in a then existing ‘‘018’’ 

series ECCN, then the item is per se not 

within the scope of a ‘‘600 series’’ 

ECCN. If the item was not listed 

elsewhere on the CCL at the time of 

such determination (i.e., the item was 

designated EAR99), the item shall 

remain designated as EAR99 unless 

specifically enumerated by BIS or DDTC 

in an amendment to the CCL or to the 

USML, respectively. 

(d) Voluntary Self-Disclosure. Parties 

to transactions involving transitioning 

items are cautioned to monitor closely 

their compliance with the EAR and the 

ITAR. Should a possible or actual 

violation of the EAR, or of any license 

or authorization issued thereunder, be 

discovered, the person or persons 

involved are strongly encouraged to 

submit a Voluntary Self-Disclosure to 

the Office of Export Enforcement, in 

accordance with § 764.5 of the EAR. 

Permission from the Office of Exporter 

Services, in accordance with § 764.5(f) 

of the EAR, to engage in further 

activities in connection with that item 

may also be necessary. Should a 

possible or actual violation of the ITAR, 

or of any license or authorization issued 

thereunder, be discovered, the person or 

persons involved are strongly 

encouraged to submit a Voluntary 

Disclosure to DDTC, in accordance with 

§ 127.12 of the ITAR. For possible or 

actual violations of both the EAR and 

ITAR, the person or persons involved 

are strongly encouraged to submit 

disclosures to both BIS and DDTC, 

indicating to each agency that they also 

have made a disclosure to the other 

agency. 

PART 738—[AMENDED] 

■ 16. The authority citation for 15 CFR 

part 738 continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 

7430(e); 22 U.S.C. 287c; 22 U.S.C. 3201 et 

seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 

42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 

1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 

U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Notice of August 15, 2012, 77 

FR 49699 (August 16, 2012). 

■ 17. Section 738.2 is amended by: 

■ a. Revising paragraph (c); 

■ b. In the introductory text of 

paragraph (d)(1), adding paragraphs ‘‘5:’’ 

and ‘‘6:’’ after paragraph ‘‘3:’’ and before 

paragraph ‘‘9:’’; 

■ c. Adding paragraph (d)(1)(iv); and 

■ d. Adding to paragraph (d)(2)(ii) a 

sentence immediately following the fifth 

sentence. 

The revision and additions read as 

follows: 

§ 738.2 Commerce Control List (CCL) 

structure. 

* * * * * 

(c) Order of review. The CCL includes 

a Supplement No. 4 to part 774— 

Commerce Control List Order of Review. 

This supplement establishes the steps 

(i.e., the order of review) that should be 

followed in classifying items that are 

‘‘subject to the EAR.’’ 

(d) * * * 

(1) * * * 

5: Items warranting national security 

or foreign policy controls at the 

determination of the Department of 

Commerce. 

6: ‘‘600 series’’ controls items because 

they are items on the Wassenaar 

Arrangement Munitions List (WAML) or 

formerly on the U.S. Munitions List 

(USML). 

* * * * * 

(iv) Last two characters in a ‘‘600 

series’’ ECCN. The last two characters of 

each ‘‘600 series’’ ECCN generally track 

the Wassenaar Arrangement Munitions 

List (WAML) categories for the types of 

items at issue. The WAML ML21 

(‘‘software’’) and ML22 (‘‘technology’’) 

are, however, included in D 

(‘‘software’’) and E (‘‘technology’’) CCL 

product groups to remain consistent 

with the structure of the CCL. 

(2) * * * 

(ii) * * * In some ‘‘600 series’’ 

ECCNs, the STA license exception 

paragraph or a note to the License 

Exceptions section contains additional 

information on the availability of 

License Exception STA for that ECCN. 

* * * * * 

PART 740—[AMENDED] 

■ 18. The authority citation for part 740 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 7201 et seq.; 

E.O. 13026, 61 FR 58767, 3 CFR, 1996 Comp., 

p. 228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Notice of August 15, 2012, 77 

FR 49699 (August 16, 2012). 

■ 19. Section 740.1 is amended by 

adding a sentence to end of paragraph 

(a) to read as follows: 

§ 740.1 Introduction. 

* * * * * 

(a) Scope. * * * Any license 

exception authorizing reexports also 

authorizes in-country transfers, 

provided the terms and conditions for 

reexports under that license exception 

are met. 

* * * * * 

■ 20. Section 740.2 is amended by 

adding paragraphs (a)(12), (13), (15), and 

(16), and a note to paragraph (a) to read 

as follows: 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22709 

§ 740.2 Restrictions on all license 

exceptions. 

(a) * * * 

(12) The item is described in a ‘‘600 

series’’ ECCN and is destined to, 

shipped from, or was manufactured in 

a destination listed in Country Group 

D:5 (see Supplement No.1 to part 740 of 

the EAR), except that such items are 

eligible for License Exception GOV 

(§ 740.11(b)(2) of the EAR) unless 

otherwise restricted by that paragraph. 

(13) ‘‘600 series’’ items that are 

controlled for missile technology (MT) 

reasons may not be exported, 

reexported, or transferred (in-country) 

under License Exception STA (§ 740.20 

of the EAR). Items controlled under 

ECCNs 9D610.b, 9D619.b, 9E610.b, or 

9E619.b or .c are not eligible for license 

exceptions except for License Exception 

GOV (§ 740.11(b)(2) of the EAR). The 

only license exceptions under which 

other ‘‘600 series’’ items may be 

exported to destinations not identified 

in Country Group D:5 (see Supplement 

No.1 to part 740 of the EAR) are the 

following: 

(i) License Exception LVS (§ 740.3 of 

the EAR); 

(ii) License Exception TMP (§ 740.9 of 

the EAR); 

(iii) License Exception RPL (§ 740.10 

of the EAR); 

(iv) License Exception TSU 

(§ 740.13(a) or (b) of the EAR); 

(v) License Exception GOV 

(§ 740.11(b) or (c) of the EAR); and 

(vi) License Exception STA under 

§ 740.20(c)(1) of the EAR if the ‘‘600 

series’’ item at the time of export, 

reexport, or transfer (in-country): 

(A) Is destined to one of the countries 

listed in Country Group A:5 or the 

United States; 

(B) Is for the ultimate end use by the 

armed forces, police, paramilitary, law 

enforcement, customs, correctional, fire, 

or a search and rescue agency of a 

government of one of the countries 

listed in Country Group A:5 or the 

United States Government, or the 

‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, overhaul, or refurbishing of an 

item in one of the countries listed in 

Country Group A:5 or the United States 

for ultimate end use by any such 

government agencies, the United States 

Government, or a person in the United 

States; 

(C) Is transferred in compliance with 

the conditions on the use of License 

Exception STA contained in 

§ 740.20(b)(2) of the EAR; and 

(D) Is not precluded in the relevant 

ECCN from being exported under 

License Exception STA or until after the 

review and clearance requirements in 

§ 740.20(g) of the EAR for ECCN 

9A610.a end items have been satisfied. 

* * * * * 

(15) If they are sold under a contract 

that includes $14,000,000 or more of 

‘‘600 Series Major Defense Equipment’’ 

(as defined in § 772.1), exports of ‘‘600 

series’’ items to a country not listed in 

Country Group A:5 (see Supplement No. 

1 to Part 740 of the EAR), are not 

eligible for any license exception except 

to U.S. Government end users under 

License Exception GOV (§ 740.11(b) of 

the EAR). 

(16) If they are sold under a contract 

that includes $25,000,000 or more of 

‘‘600 Series Major Defense Equipment’’ 

(as defined in § 772.1), exports of ‘‘600 

series’’ items to a country listed in 

Country Group A:5 (see Supplement No. 

1 to Part 740 of the EAR), are not 

eligible for any license exception except 

to U.S. Government end users under 

License Exception GOV (§ 740.11(b) of 

the EAR). 

Note to paragraph (a): Items subject to the 

exclusive export control jurisdiction of 

another agency of the U.S. Government may 

not be authorized by a license exception or 

any other authorization under the EAR. If 

your item is subject to the exclusive 

jurisdiction of another agency of the U.S. 

Government, you must determine your 

export licensing requirements pursuant to the 

other agency’s regulations. See § 734.3(b) and 

Supplement No. 3 to part 730 of the EAR for 

other U.S. Government departments and 

agencies with export control responsibilities. 

* * * * * 

■ 21. Section 740.9 is amended by 

revising paragraphs (a) and (b) to read 

as follows: 

§ 740.9 Temporary imports, exports, 

reexports, and transfers (in-country) (TMP). 

* * * * * 

(a) Temporary exports, reexports, and 

transfers (in-country). License Exception 

TMP authorizes exports, reexports, and 

transfers (in-country) of items for 

temporary use abroad (including use in 

or above international waters) subject to 

the conditions specified in this 

paragraph (a). No item may be exported, 

reexported, or transferred (in-country) 

under this paragraph (a) if an order to 

acquire the item, such as a purchase 

order, has been received before 

shipment; with prior knowledge that the 

item will stay abroad beyond the terms 

of this License Exception; or when the 

item is for subsequent lease or rental 

abroad. The references to various 

countries and country groups in these 

TMP-specific provisions do not limit or 

amend the prohibitions in § 740.2 of the 

EAR on the use of license exceptions 

generally, such as for exports of ‘‘600 

series’’ items to destinations in Country 

Group D:5. 

(1) Tools of trade. Exports, reexports, 

or transfers (in-country) of commodities 

and software as tools of trade for use by 

the exporter or employees of the 

exporter may be made only to 

destinations other than Country Group 

E:1; for Sudan, see paragraph (a)(2) of 

this section. The tools of trade must 

remain under the ‘‘effective control’’ of 

the exporter or the exporter’s employee. 

Eligible items are usual and reasonable 

kinds and quantities of tools of trade for 

use in a lawful enterprise or 

undertaking of the exporter. Tools of 

trade include, but are not limited to, 

commodities and software as is 

necessary to commission or service 

items, provided that the commodity or 

software is appropriate for this purpose 

and that all items to be commissioned 

or serviced are of foreign origin, or if 

subject to the EAR, have been lawfully 

exported, reexported, or transferred. 

Tools of trade may accompany the 

individual departing from the United 

States or may be shipped 

unaccompanied within one month 

before the individual’s departure from 

the United States, or at any time after 

departure. Software used as a tool of 

trade must be protected against 

unauthorized access. Examples of 

security precautions to help prevent 

unauthorized access include the 

following: 

(i) Use of secure connections, such as 

Virtual Private Network connections, 

when accessing IT networks for 

activities that involve the transmission 

and use of the software authorized 

under this license exception; 

(ii) Use of password systems on 

electronic devices that store the 

software authorized under this license 

exception; and 

(iii) Use of personal firewalls on 

electronic devices that store the 

software authorized under this license 

exception. 

(2) Sudan: Tools of Trade. (i) 

Permissible users. A non-governmental 

organization or an individual staff 

member, employee or contractor of such 

organization traveling to Sudan at the 

direction or with the knowledge of such 

organization may export, reexport, or 

transfer (in-country) under this 

paragraph (a)(2). 

(ii) Authorized purposes. Any tools of 

trade exported, reexported, or 

transferred (in-country) under this 

paragraph must be used to support 

activities to implement the Doha 

Document for Peace in Darfur; to 

provide humanitarian or development 

assistance in Sudan, to support 

activities to relieve human suffering in 

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22710 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

Sudan, or to support the actions in 

Sudan for humanitarian or development 

purposes; by an organization authorized 

by the Department of the Treasury, 

Office of Foreign Assets Control (OFAC) 

pursuant to 31 CFR 538.521 in support 

of its OFAC-authorized activities; or to 

support the activities to relieve human 

suffering in Sudan in areas that are 

exempt from the Sudanese Sanctions 

Regulations by virtue of the Darfur 

Peace and Accountability Act and 

Executive Order 13412. 

(iii) Method of export and 

maintenance of control. The tools of 

trade must accompany (either hand 

carried or as checked baggage) a traveler 

who is a permissible user of this 

provision or be shipped or transmitted 

to such user by a method reasonably 

calculated to assure delivery to the 

permissible user of this provision. The 

permissible user of this provision must 

maintain ‘‘effective control’’ of the tools 

of trade while in Sudan. 

(iv) Eligible items. The only tools of 

trade that may be exported, reexported 

or transferred (in-country) to Sudan 

under this paragraph (a)(2) are: 

(A) Commodities controlled under 

ECCNs 4A994.b and ‘‘software’’ 

controlled under ECCNs 4D994 or 

5D992 to be used on such commodities. 

Software must either be loaded onto the 

commodities prior to export, reexport, 

or transfer (in-country) or be exported, 

reexported, or transferred (in-country) 

solely for servicing or in-kind 

replacement of legally exported or 

reexported software. All such software 

must remain loaded on the commodities 

while in Sudan; 

(B) Telecommunications equipment 

controlled under ECCN 5A991 and 

‘‘software’’ controlled under ECCN 

5D992 to be used in the operation of 

such equipment. Software must be 

loaded onto such equipment prior to 

export or be exported or reexported 

solely for servicing or in-kind 

replacement of legally exported or 

reexported software. All such software 

must remain loaded on such equipment 

while in Sudan; 

(C) Global positioning systems (GPS) 

or similar satellite receivers controlled 

under ECCN 7A994; and 

(D) Commodities that are controlled 

under ECCN 5A992, including 

commodities that are installed with, or 

contained in, commodities in 

paragraphs (a)(2)(iv)(A) and (B) of this 

section and that remain installed with 

or contained in such commodities while 

in Sudan. (3) Tools of trade: temporary 

exports, reexports, and transfers (incountry) of technology by U.S. persons. 

(i) This paragraph authorizes exports, 

reexports, and transfers (in-country) of 

usual and reasonable kinds and 

quantities of technology for use in a 

lawful enterprise or undertaking of a 

U.S. person to destinations other than 

Country Group E:1. Only U.S. persons 

or their employees traveling or on 

temporary assignment abroad may 

export, reexport, transfer (in-country) or 

receive technology under the provisions 

of this paragraph (a)(3). 

(A) Because this paragraph (a)(3) does 

not authorize any new release of 

technology, employees traveling or on 

temporary assignment abroad who are 

not U.S. persons may only receive under 

TMP such technology abroad that they 

are already eligible to receive through a 

current license, a license exception 

other than TMP, or because no license 

is required; 

(B) A U.S. employer of individuals 

who are not U.S. persons must 

demonstrate and document for 

recordkeeping purposes the reason that 

the technology is needed by such 

employees in their temporary business 

activities abroad on behalf of the U.S. 

person employer, prior to using this 

paragraph (a)(3). This documentation 

must be created and maintained in 

accordance with the recordkeeping 

requirements of part 762 of the EAR; 

and 

(C) The U.S. person must retain 

supervision over the technology that has 

been authorized for export, reexport, or 

transfer (in-country) under these or 

other provisions. 

(ii) The exporting, reexporting, or 

transferring party and the recipient of 

the technology must take security 

precautions to protect against 

unauthorized release of the technology 

while the technology is being shipped 

or transmitted and used overseas. 

Examples of security precautions to 

help prevent unauthorized access 

include the following: 

(A) Use of secure connections, such as 

Virtual Private Network connections, 

when accessing IT networks for email 

and other business activities that 

involve the transmission and use of the 

technology authorized under this 

license exception; 

(B) Use of password systems on 

electronic devices that will store the 

technology authorized under this 

license exception; and 

(C) Use of personal firewalls on 

electronic devices that will store the 

technology authorized under this 

license exception. 

(iii) Technology authorized under 

these provisions may not be used for 

foreign production purposes or for 

technical assistance unless authorized 

by BIS. 

(iv) Encryption technology controlled 

by ECCN 5E002 is ineligible for this 

license exception. 

(4) Kits consisting of replacement 

parts or components. Kits consisting of 

replacement parts or components may 

be exported, reexported, or transferred 

(in-country) to all destinations except 

Country Group E:1 (see Supplement No. 

1 to part 740 of the EAR), provided that: 

(i) The parts and components would 

qualify for shipment under paragraph 

(a)(4)(iii) of this section if exported as 

one-for-one replacements; 

(ii) The kits remain under effective 

control of the exporter or an employee 

of the exporter; and 

(iii) All parts and components in the 

kit are returned, except that one-for-one 

replacements may be made in 

accordance with the requirements of 

License Exception RPL and the 

defective parts and components 

returned (see Parts, Components, 

Accessories and Attachments in 

§ 740.10(a) of this part). 

(5) Exhibition and demonstration. 

This paragraph (a)(5) authorizes exports, 

reexports, and transfers (in-country) of 

commodities and software for exhibition 

or demonstration in all destinations 

except Country Group E:1 (see 

Supplement No. 1 to this part) provided 

that the exporter maintains ownership 

of the commodities and software while 

they are abroad and provided that the 

exporter, an employee of the exporter, 

or the exporter’s designated sales 

representative retains ‘‘effective 

control’’ over the commodities and 

software while they are abroad. The 

commodities and software may not be 

used when abroad for more than the 

minimum extent required for effective 

demonstration. The commodities and 

software may not be exhibited or 

demonstrated at any one site for longer 

than 120 days after installation and 

debugging, unless authorized by BIS. 

However, before or after an exhibition or 

demonstration, pending movement to 

another site, return to the United States 

or the foreign reexporter, or BIS 

approval for other disposition, the 

commodities and software may be 

placed in a bonded warehouse or a 

storage facility provided that the 

exporter retains ‘‘effective control’’ over 

their disposition. The export 

documentation for this type of 

transaction must show the exporter as 

ultimate consignee, in care of the person 

who will have control over the 

commodities and software abroad. 

(6) Inspection and calibration. 

Commodities to be inspected, tested, 

calibrated, or repaired abroad may be 

exported, reexported, and transferred 

(in-country) under this paragraph (a)(6) 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22711 

to all destinations except Country Group 

E:1. 

(7) Containers. Containers for which 

another license exception is not 

available and that are necessary for 

shipment of commodities may be 

exported, reexported, and transferred 

(in-country) under this paragraph (a)(7). 

However, this paragraph does not 

authorize the export of the container’s 

contents, which, if not exempt from 

licensing, must be separately authorized 

for export under either a license 

exception or a license. 

(8) Assembly in Mexico. Commodities 

may be exported to Mexico under 

Customs entries that require return to 

the United States after processing, 

assembly, or incorporation into end 

products by companies, factories, or 

facilities participating in Mexico’s inbond industrialization program 

(Maquiladora) under this paragraph 

(a)(8), provided that all resulting endproducts (or the commodities 

themselves) are returned to the United 

States. 

(9) News media. (i) Commodities 

necessary for news-gathering purposes 

(and software necessary to use such 

commodities) may be temporarily 

exported or reexported for accredited 

news media personnel (i.e., persons 

with credentials from a news-gathering 

or reporting firm) to Cuba, North Korea, 

Sudan, or Syria (see Supplement No. 1 

to part 740) if the commodities: 

(A) Are retained under ‘‘effective 

control’’ of the exporting news-gathering 

firm in the country of destination; 

(B) Remain in the physical possession 

of the news media personnel in the 

country of destination. The term 

physical possession for purposes of this 

paragraph (a)(9) means maintaining 

effective measures to prevent 

unauthorized access (e.g., securing 

equipment in locked facilities or hiring 

security guards to protect the 

equipment); and 

(C) Are removed with the news media 

personnel at the end of the trip. 

(ii) When exporting under this 

paragraph (a)(9) from the United States, 

the exporter must email a copy of the 

packing list or similar identification of 

the exported commodities, to 

bis.compliance@bis.doc.gov specifying 

the destination and estimated dates of 

departure and return. The Office of 

Export Enforcement (OEE) may check 

returns to assure that the provisions of 

this paragraph (a)(9) are being used 

properly. 

(iii) Commodities or software 

necessary for news-gathering purposes 

that accompany news media personnel 

to all other destinations shall be 

exported, reexported, or transferred (incountry) under paragraph (a)(1), tools of 

trade, of this section if owned by the 

news gathering firm, or if they are 

personal property of the individual 

news media personnel. Note that 

paragraphs (a)(1), tools of trade, and 

(a)(9), news media, of this section do not 

preclude independent accredited 

contract personnel, who are under 

control of news-gathering firms while 

on assignment, from using these 

provisions, provided that the news 

gathering firm designates an employee 

of the contract firm to be responsible for 

the equipment. 

(10) Temporary exports to a U.S. 

person’s foreign subsidiary, affiliate, or 

facility abroad. Components, parts, 

tools, accessories, or test equipment 

exported by a U.S. person to a 

subsidiary, affiliate, or facility owned or 

controlled by the U.S. person, if the 

components, parts, tools, accessories, or 

test equipment are to be used to 

manufacture, assemble, test, produce, or 

modify items, provided that such 

components, parts, tools, accessories or 

test equipment are not transferred (incountry) or reexported from such 

subsidiary, affiliate, or facility, alone or 

incorporated into another item, without 

prior authorization by BIS. 

(11) [Reserved]. 

(12) U.S. persons. For purposes of this 

§ 740.9, a U.S. person is defined as 

follows: an individual who is a citizen 

of the United States, an individual who 

is a lawful permanent resident as 

defined by 8 U.S.C. 1101(a)(2) or an 

individual who is a protected individual 

as defined by 8 U.S.C. 1324b(a)(3). U.S. 

person also means any juridical person 

organized under the laws of the United 

States, or any jurisdiction within the 

United States (e.g., corporation, 

business association, partnership, 

society, trust, or any other entity, 

organization or group that is authorized 

to do business in the United States). 

(13) Destinations. Destination 

restrictions apply to temporary exports, 

reexports, or transfers (in-country) to 

and for use on any vessel, aircraft or 

territory under ownership, control, 

lease, or charter by any country 

specified in any authorizing paragraph 

of this section, or any national thereof. 

(14) Return or disposal of items. All 

items exported, reexported, or 

transferred (in-country) under these 

provisions must, if not consumed or 

destroyed in the normal course of 

authorized temporary use abroad, be 

returned as soon as practicable but no 

later than one year after the date of 

export, reexport, or transfer to the 

United States or other country from 

which the items were so transferred. 

Items not returned shall be disposed of 

or retained in one of the following ways: 

(i) Permanent export, reexport, or 

transfer (in-country). An exporter or 

reexporter who wants to sell or 

otherwise dispose of the items abroad, 

except as permitted by this or other 

applicable provision of the EAR, must 

apply for a license in accordance with 

§§ 748.1, 748.4 and 748.6 of the EAR. 

(Part 748 of the EAR contains for more 

information about license applications.) 

The application must be supported by 

any documents that would be required 

in support of an application for export 

license for shipment of the same items 

directly from the United States to the 

proposed destination. 

(ii) Use of a license. An outstanding 

license may also be used to dispose of 

items covered by the provisions of this 

paragraph (a), provided that the 

outstanding license authorizes direct 

shipment of the same items to the same 

new ultimate consignee or end-user. 

(iii) Authorization to retain item 

abroad beyond one year. An exporter, 

reexporter or transferor who wants to 

retain an item at the temporary location 

beyond one year must apply for a 

license in accordance with §§ 748.1, 

748.4 and 748.6 of the EAR to BIS at 

least 90 days prior to the expiration of 

the one-year period. The application 

must include the name and address of 

the exporter, the date the items were 

exported, a brief product description, 

and the justification for the extension. If 

BIS approves the extension, the 

applicant will receive authorization for 

an extension not to exceed four years 

from the date of initial export, reexport, 

or transfer. Any request for retaining the 

items abroad for a period exceeding four 

years must be made in accordance with 

the requirements of paragraph (a)(14)(i) 

of this section. 

(b) Exports of items temporarily in the 

United States. (1) Items moving in 

transit through the United States. 

Subject to the following conditions, the 

provisions of this paragraph (b)(1) 

authorize export of items moving in 

transit through the United States under 

a Transportation and Exportation 

(T.&E.) customs entry or an Immediate 

Exportation (I.E.) customs entry made at 

a U.S. Customs and Border Protection 

Office. 

(i) Items controlled for national 

security (NS) reasons, nuclear 

proliferation (NP) reasons, or chemical 

and biological weapons (CB) reasons 

may not be exported to Country Group 

D:1, D:2, or D:3 (see Supplement No. 1 

to part 740), respectively, under this 

paragraph (b)(1). 

(ii) Items may not be exported to 

Country Group E:1 under this section. 

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22712 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

(iii) The following may not be 

exported from the United States under 

this paragraph (b)(1): 

(A) Commodities shipped to the 

United States under an International 

Import Certificate, Form BIS–645P; 

(B) Chemicals controlled under ECCN 

1C350; or 

(C) Horses for export by sea (refer to 

short supply controls in part 754 of the 

EAR). 

(iv) The authorization to export in 

paragraph (b)(1) shall apply to all 

shipments from Canada moving in 

transit through the United States to any 

foreign destination, regardless of the 

nature of the commodities or software or 

their origin, notwithstanding any other 

provision of this paragraph (b)(1). 

(2) Items imported for marketing, or 

for display at U.S. exhibitions or trade 

fairs. Subject to the following 

conditions, the provisions of this 

paragraph (b)(2) authorize the export of 

items that were imported into the 

United States for marketing, or for 

display at an exhibition or trade fair and 

were either entered under bond or 

permitted temporary free import under 

bond providing for their export and are 

being exported in accordance with the 

terms of that bond. 

(i) Items may be exported to the 

country from which imported into the 

United States. However, items originally 

imported from Cuba may not be 

exported unless the U.S. Government 

had licensed the import from that 

country. 

(ii) Items may be exported to any 

destination other than the country from 

which imported except: 

(A) Items imported into the United 

States under an International Import 

Certificate; 

(B) Exports to Country Group E:1 (see 

Supplement No. 1 to part 740); or 

(C) Exports to Country Group D:1, D:2, 

or D:3 (see Supplement No. 1 to part 

740) of items controlled for national 

security (NS) reasons, nuclear 

nonproliferation (NP) reasons, or 

chemical and biological weapons (CB) 

reasons, respectively. 

(3) Return of foreign-origin items. A 

foreign-origin item may be returned 

under this license exception to the 

country from which it was imported if 

its characteristics and capabilities have 

not been enhanced while in the United 

States, except that no foreign-origin 

items may be returned to Cuba. 

(4) Return of shipments refused entry. 

Shipments of items refused entry by the 

U.S. Customs and Border Protection, the 

Food and Drug Administration, or other 

U.S. Government agency may be 

returned to the country of origin, except 

to: 

(i) A destination in Cuba; or 

(ii) A destination from which the 

shipment has been refused entry 

because of the Foreign Assets Control 

Regulations of the Treasury Department, 

unless such return is licensed or 

otherwise authorized by the Treasury 

Department, Office of Foreign Assets 

Control (31 CFR parts 500–599). 

Note 1 to paragraph (b): A commodity 

withdrawn from a bonded warehouse in the 

United States under a ‘withdrawal for export’ 

customs entry is considered as ‘moving in 

transit’. It is not considered as ‘moving in 

transit’ if it is withdrawn from a bonded 

warehouse under any other type of customs 

entry or if its transit has been broken for a 

processing operation, regardless of the type 

of customs entry. 

Note 2 to paragraph (b): Items shipped on 

board a vessel or aircraft and passing through 

the United States from one foreign country to 

another may be exported without a license 

provided that (a) while passing in transit 

through the United States, they have not been 

unladen from the vessel or aircraft on which 

they entered, and (b) they are not originally 

manifested to the United States. 

Note 3 to paragraph (b): A shipment 

originating in Canada or Mexico that 

incidentally transits the United States en 

route to a delivery point in the same country 

does not require a license. 

* * * * * 

■ 22. Section 740.10 is revised to read 

as follows: 

§ 740.10 License Exception Servicing and 

replacement of parts and equipment (RPL). 

License Exception RPL authorizes 

exports and reexports associated with 

one-for-one replacement of parts, 

components, accessories, and 

attachments. License Exception RPL 

also authorizes exports and reexports of 

certain items currently ‘‘subject to the 

EAR’’ to or for, or to replace, a defense 

article described in an export or 

reexport authorization issued under the 

authority of the Arms Export Control 

Act. It does not, however, authorize the 

export or reexport of defense articles 

subject to the ITAR, i.e., described on 

the United States Munitions List (22 

CFR 121.1). 

(a) Parts, Components, Accessories, 

and Attachments. (1) Scope. The 

provisions of this paragraph (a) 

authorize the export and reexport of 

one-for-one replacement parts, 

components, accessories, and 

attachments for previously exported 

equipment or other end items. 

(2) One-for-one replacement of parts, 

components, accessories, or 

attachments. (i) The terms replacement 

parts, components, accessories, or 

attachments as used in this section 

mean parts, components, accessories, or 

attachments needed for the immediate 

repair of equipment or other end items, 

including replacement of defective or 

worn parts or components. (These terms 

include ‘subassemblies,’ but do not 

include test instruments or operating 

supplies. The term ‘subassembly’ means 

a number of parts or components 

assembled to perform a specific function 

or functions within a commodity. One 

example would be printed circuit 

boards with components mounted 

thereon. This definition does not 

include major subsystems such as those 

composed of a number of 

‘subassemblies.’) Items that improve or 

change the basic design characteristics, 

e.g., as to accuracy, capability, 

performance or productivity, of the 

equipment or other end item upon 

which they are installed, are not 

deemed to be replacement parts, 

components, accessories, or 

attachments. For kits consisting of 

replacement parts or components, 

consult § 740.9(a)(4) of this part. 

(ii) Parts, components, accessories, 

and attachments may be exported only 

to replace, on a one-for-one basis, parts, 

components, accessories, or 

attachments, respectively, contained in 

commodities that were: lawfully 

exported from the United States; 

lawfully reexported; or made in a 

foreign country incorporating 

authorized U.S.-origin parts, 

components, accessories, or 

attachments. ‘‘600 series’’ parts, 

components, accessories and 

attachments may be exported only to 

replace, on a one-for-one basis, parts, 

components, accessories, or attachments 

that were: lawfully exported from the 

United States, or lawfully reexported. 

(For exports or reexports to the installed 

base in Libya, see § 764.7 of the EAR.) 

The conditions of the original U.S. 

authorization must not have been 

violated. Accordingly, the export of 

replacement parts, components, 

accessories, and attachments may be 

made only by the party who originally 

exported or reexported the commodity 

to be repaired, or by a party that has 

confirmed the existence of appropriate 

authority for the original transaction. 

(iii) The parts, components, 

accessories, or attachments to be 

replaced must either be destroyed 

abroad or returned promptly to the 

person who supplied the replacements, 

or to a foreign firm that is under the 

effective control of that person. 

(3) Exclusions to License Exception 

RPL. (i) No replacement parts, 

components, accessories, or attachments 

may be exported to repair a commodity 

exported under a license or other 

authorization if that license or other 

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authorization included a condition that 

any subsequent replacements may be 

exported only under a license. 

(ii) No parts, components, accessories, 

or attachments may be exported to be 

held abroad as spares for future use. 

Replacements may be exported to 

replace spares that were authorized to 

accompany the export of equipment or 

other end items as those spares are used 

in the repair of the equipment or other 

end item. This allows maintenance of 

the stock of spares at a consistent level 

as the parts, components, accessories, or 

attachments are used. 

(iii) No parts, components, 

accessories, or attachments may be 

exported to any destination, except the 

countries listed in Supplement No. 3 to 

part 744 of the EAR (Countries Not 

Subject to Certain Nuclear End Use 

Restrictions in § 744.2(a)), if the item is 

to be incorporated into or used in 

nuclear weapons, nuclear explosive 

devices, nuclear testing related to 

activities described in § 744.2(a) of the 

EAR, the chemical processing of 

irradiated special nuclear or source 

material, the production of heavy water, 

the separation of isotopes of source and 

special nuclear materials, or the 

fabrication of nuclear reactor fuel 

containing plutonium, as described in 

§ 744.2(a) of the EAR. 

(iv) No replacement parts, 

components, accessories, or attachments 

may be exported to countries in Country 

Group E:1 (see Supplement No. 1 to this 

part) (countries designated by the 

Secretary of State as supporting acts of 

international terrorism) if the 

commodity to be repaired is an 

‘‘aircraft’’ (as defined in § 772.1 of the 

EAR) or is controlled for national 

security (NS) reasons. 

(v) No replacement parts, 

components, accessories, or attachments 

may be exported to countries in Country 

Group E:1 (see Supplement No. 1 to this 

part) if the commodity to be repaired is 

explosives detection equipment 

classified under ECCN 2A983 or related 

software classified under ECCN 2D983. 

(vi) No replacement parts, 

components, accessories, or attachments 

may be exported to countries in Country 

Group E:1 (see Supplement No. 1 to this 

part) if the commodity to be repaired is 

concealed object detection equipment 

classified under ECCN 2A984 or related 

software classified under ECCN 2D984. 

(vii) The conditions described in this 

paragraph (a)(3) relating to replacement 

of parts, components, accessories, or 

attachments do not apply to reexports to 

a foreign country of parts, components 

accessories, or attachments as 

replacements in foreign-origin products, 

if at the time the replacements are 

furnished, the foreign-origin product is 

eligible for export to such country under 

any of the license exceptions in this part 

or the exceptions in § 734.4 of the EAR 

(De minimis U.S. content). 

(viii) Parts, components, accessories, 

and attachments classified in ‘‘600 

Series’’ ECCNs may not be exported or 

reexported to a destination listed in 

Country Group D:5 (see Supplement No. 

1 to this part). 

(4) Reexports. (i) Parts, components, 

accessories, and attachments exported 

from the United States may be 

reexported to a new country of 

destination, provided that the 

conditions established in paragraphs 

(a)(2) and (3) of this section are met. A 

party reexporting U.S.-origin one-forone replacement parts, components, 

accessories, or attachments shall ensure 

that the commodities being repaired 

were shipped to their present location 

in accordance with U.S. law and 

continue to be lawfully used, and that 

either before or promptly after reexport 

of the replacement parts, components, 

accessories, or attachments, the replaced 

commodities and software are either 

destroyed or returned to the United 

States, or to the foreign firm in Country 

Group B (see Supplement No. 1 to this 

part) that shipped the replacement 

parts. 

(ii) The conditions described in 

paragraph (a)(3) relating to replacement 

of parts, components, accessories, or 

attachments (excluding ‘‘600 series’’ 

ECCNs) do not apply to reexports to a 

foreign country of parts, components, 

accessories, or attachments as 

replacements in foreign-origin products, 

if at the time the replacements are 

furnished, the foreign-origin product is 

eligible for export to such country under 

any of the License Exceptions in this 

part or the foreign-origin product is not 

subject to the EAR pursuant to § 734.4. 

(b) Servicing and replacement. (1) 

Scope. The provisions of this paragraph 

(b) authorize the export and reexport to 

any destination, except for ‘‘600 series’’ 

items to destinations identified in 

Country Group D:5 (see Supplement No. 

1 to this part) or otherwise prohibited 

under the EAR, of commodities and 

software that were returned to the 

United States for servicing and the 

replacement of defective or 

unacceptable U.S.-origin commodities 

and software. 

(2) Commodities and software sent to 

a United States or foreign party for 

servicing. 

(i) Definition. ‘‘Servicing’’ as used in 

this section means inspection, testing, 

calibration or repair, including overhaul 

and reconditioning. The servicing shall 

not have improved or changed the basic 

characteristics (e.g., the accuracy, 

capability, performance, or 

productivity) of the commodity or 

software as originally authorized for 

export or reexport. 

(ii) Return of serviced commodities 

and software. When the serviced 

commodity or software is returned, it 

may include any replacement or rebuilt 

parts, components, accessories, or 

attachments necessary to its repair and 

may be accompanied by any spare parts, 

components, tools, accessories, 

attachments or other items sent with it 

for servicing. 

(iii) Commodities and software 

imported from Country Group D:1 

except the People’s Republic of China 

(PRC). Commodities and software 

legally exported or reexported to a 

consignee in Country Group D:1 (except 

the People’s Republic of China (PRC)) 

(see Supplement No. 1 to this part) that 

are sent to the United States or a foreign 

party for servicing may be returned to 

the country from which it was sent, 

provided that both of the following 

conditions are met: 

(A) The exporter making the shipment 

is the same person or firm to whom the 

original license was issued; and 

(B) The end use and the end user of 

the serviced commodities or software 

and other particulars of the transaction, 

as set forth in the application and 

supporting documentation that formed 

the basis for issuance of the license have 

not changed. 

(iv) Terrorist supporting countries. No 

repaired commodity or software may be 

exported or reexported to countries in 

Country Group E:1 (see Supplement No. 

1 to this part). 

(3) Replacements for defective or 

unacceptable U.S.-origin equipment. 

(i) Subject to the following conditions, 

commodities or software may be 

exported or reexported to replace 

defective or otherwise unusable (e.g., 

erroneously supplied) items. 

(A) The commodity or software is 

‘‘subject to the EAR’’ (see § 734.2(a) of 

the EAR). 

(B) The commodity or software to be 

replaced must have been previously 

exported or reexported in its present 

form under a license or authorization 

granted by BIS or an authorization, e.g., 

a license or exemption, issued under the 

authority of the Arms Export Control 

Act. 

(C) No commodity or software may be 

exported or reexported to replace 

equipment that is worn out from normal 

use, nor may any commodity or 

software be exported to be held in stock 

abroad as spare equipment for future 

use. 

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(D) The replacement item may not 

improve the basic characteristic, e.g., as 

to accuracy, capability, performance, or 

productivity, of the equipment as 

originally authorized, e.g., under a 

license, license exception or an 

exemption, for export or reexport. 

(E) No shipment may be made to 

countries in Country Group E:1 (see 

Supplement No. 1 to this part), or to any 

other destination to replace defective or 

otherwise unusable equipment owned 

or controlled by, or leased or chartered 

to, a national of any of those countries. 

(F) Commodities or software ‘‘subject 

to the EAR’’ and classified in ‘‘600 

Series’’ ECCNs may not be exported or 

reexported to a destination identified in 

Country Group D:5 (see Supplement No. 

1 to this part). 

(ii) Special conditions applicable to 

exports to Country Group B and Country 

Group D:1. In addition to the general 

conditions in paragraph (b)(3)(i) of this 

section, the following conditions apply 

to exports or reexports of replacements 

for defective or unacceptable U.S.-origin 

commodities or software to a 

destination in Country Group B or 

Country Group D:1 (see Supplement No. 

1 to this part): 

(A) By making such an export or 

reexport, the exporter represents that all 

the requirements of this paragraph (b) 

have been met and undertakes to 

destroy or return the replaced parts as 

provided in paragraph (b)(3)(ii)(C) of 

this section. 

(B) The defective or otherwise 

unusable equipment must be replaced 

free of charge, except for transportation 

and labor charges. If exporting to the 

countries listed in Country Group D:1 

(except the PRC), the exporter shall 

replace the commodity or software 

within the warranty period or within 12 

months of its shipment to the ultimate 

consignee in the country of destination, 

whichever is shorter. 

(C) The commodity or software to be 

replaced must either be destroyed 

abroad or returned to the United States, 

or to a foreign firm in Country Group B 

that is under the effective control of the 

exporter, or to the foreign firm that is 

providing the replacement part or 

equipment. The destruction or return 

must be effected before, or promptly 

after, the replacement item is exported 

from the United States. 

(D) A party reexporting replacements 

for defective or unacceptable U.S.-origin 

equipment must ensure that the 

commodities or software being replaced 

were shipped to their present location 

in accordance with U.S. law and 

continue to be legally used. See § 764.7 

of the EAR for exports or reexports to 

the installed base in Libya. 

(c) Special recordkeeping 

requirements: ECCNs 2A983, 2A984, 

2D983 and 2D984, and ‘‘600 Series’’ 

ECCNs. (1) In addition to the other 

recordkeeping requirements set forth 

elsewhere in the EAR, exporters are 

required to maintain records, as 

specified in this section, for any items 

exported or reexported pursuant to 

License Exception RPL to repair, 

replace, or service previously lawfully 

exported or reexported items classified 

under ECCNs 2A983, 2A984, 2D983 and 

2D984 or a ‘‘600 Series’’ ECCN. The 

following information must be 

maintained for each such export or 

reexport transaction: 

(i) A description of the item replaced, 

repaired or serviced; 

(ii) The type of repair or service; 

(iii) Certification of the destruction or 

return of item replaced; 

(iv) Location of the item replaced, 

repaired or serviced; 

(v) The name and address of those 

who received the items for replacement, 

repair, or service; 

(vi) Quantity of items shipped; and 

(vii) Country of ultimate destination. 

(2) Records maintained pursuant to 

this section may be requested at any 

time by an appropriate BIS official as set 

forth in § 762.7 of the EAR. Records that 

must be included in the annual or semiannual reports of exports and reexports 

of ‘‘600 Series’’ items under the 

authority of License Exception RPL are 

described in § 743.4 and § 762.2(b)(4), 

(b)(47) and (b)(48). 

■ 23. Section 740.11 is revised to read 

as follows: 

§ 740.11 Governments, International 

Organizations, International Inspections 

under the Chemical Weapons Convention, 

and the International Space Station (GOV). 

This License Exception authorizes 

exports and reexports for international 

nuclear safeguards; U.S. government 

agencies or personnel; agencies of 

cooperating governments; international 

inspections under the Chemical 

Weapons Convention; and the 

International Space Station. 

(a) International Safeguards. (1) 

Scope. The International Atomic Energy 

Agency (IAEA) is an international 

organization that establishes and 

administers safeguards, including 

Additional Protocols, designed to 

ensure that special nuclear materials 

and other related nuclear facilities, 

equipment, and material are not 

diverted from peaceful purposes to nonpeaceful purposes. European Atomic 

Energy Community (Euratom) is an 

international organization of European 

countries with headquarters in 

Luxembourg. Euratom establishes and 

administers safeguards designed to 

ensure that special nuclear materials 

and other related nuclear facilities, 

equipment, and material are not 

diverted from peaceful purposes to nonpeaceful purposes. This paragraph (a) 

authorizes exports and reexports of 

commodities or software to the IAEA 

and Euratom, and reexports by IAEA 

and Euratom for official international 

safeguard use, as follows: 

(i) Commodities or software 

consigned to the IAEA at its 

headquarters in Vienna, Austria or its 

field offices in Toronto, Ontario, Canada 

or in Tokyo, Japan for official 

international safeguards use. 

(ii) Commodities or software 

consigned to the Euratom Safeguards 

Directorate in Luxembourg, Luxembourg 

for official international safeguards use. 

(iii) Commodities or software 

consigned to IAEA or Euratom may be 

reexported to any country for IAEA or 

Euratom international safeguards use 

provided that IAEA or Euratom 

maintains control of or otherwise 

safeguards the commodities or software 

and returns the commodities or software 

to the locations described in paragraphs 

(a)(1)(i) and (a)(1)(ii) of this section 

when they become obsolete, are no 

longer required, or are replaced. 

(iv) Commodity or software shipments 

may be made by persons under direct 

contract with IAEA or Euratom, or by 

Department of Energy National 

Laboratories as directed by the 

Department of State or the Department 

of Energy. 

(v) The monitoring functions of IAEA 

and Euratom are not subject to the 

restrictions on prohibited safeguarded 

nuclear activities described in 

§ 744.2(a)(3) of the EAR. 

(vi) When commodities or software 

originally consigned to IAEA or 

Euratom are no longer in IAEA or 

Euratom official safeguards use, such 

commodities may be disposed of by 

destruction or by reexport or transfer in 

accordance with the EAR. 

(2) Restrictions. (i) Items on the 

Sensitive List (see Supplement No. 6 to 

part 774 of the EAR) may not be 

exported, reexported, or transferred (incountry) under this paragraph (a), 

except to the countries listed in Country 

Group A:5 (See Supplement No.1 to part 

740 of the EAR). 

(ii) Items on the Very Sensitive List 

(see Supplement No. 7 to part 774 of the 

EAR) may not be exported, reexported, 

or transferred (in-country) under this 

paragraph (a). 

(iii) Encryption items controlled for EI 

reasons under ECCNs 5A002, 5D002, or 

5E002 may not be exported, reexported, 

or transferred (in-country) under this 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22715 

paragraph (a). See § 740.17 of the EAR 

(License Exception ENC) for possible 

alternative license exception 

authorization. 

(iv) Without prior authorization from 

the Bureau of Industry and Security, 

nationals of countries in Country Group 

E:1(see Supplement No. 1 to this part) 

may not physically or computationally 

access computers that have been 

enhanced by ‘‘electronic assemblies,’’ 

which have been exported or reexported 

under License Exception GOV and have 

been used to enhance such computers 

by aggregation of processors so that the 

APP of the aggregation exceeds the APP 

parameter set forth in ECCN 4A003.b. 

(v) ‘‘600 series’’ items may not be 

exported or reexported under this 

paragraph (a), except to the countries 

listed in Country Group A:5 (see 

Supplement No.1 to this part). 

(b) United States Government. (1) 

Scope. The provisions of this paragraph 

(b) authorize exports, reexports, and 

transfers (in-country) to personnel and 

agencies of the U.S. Government and 

certain exports by the Department of 

Defense. ‘‘Agency of the U.S. 

Government’’ includes all civilian and 

military departments, branches, 

missions, government-owned 

corporations, and other agencies of the 

U.S. Government, but does not include 

such national agencies as the American 

Red Cross or international organizations 

in which the United States participates 

such as the Organization of American 

States. Therefore, shipments may not be 

made to these non-governmental 

national or international agencies, 

except as provided in paragraph (b)(2)(i) 

of this section for U.S. representatives to 

these organizations. 

(2) Eligibility. (i) Items for personal 

use by personnel and agencies of the 

U.S. Government. This provision is 

available for items in quantities 

sufficient only for the personal use of 

members of the U.S. Armed Forces or 

civilian personnel of the U.S. 

Government (including U.S. 

representatives to public international 

organizations), and their immediate 

families and household employees. 

Items for personal use include 

household effects, food, beverages, and 

other daily necessities. 

(ii) Exports, reexports, and transfers 

(in-country) made by or consigned to a 

department or agency of the U.S. 

Government. This paragraph authorizes 

exports, reexports, and transfers of items 

when made by or consigned to a 

department or agency of the U.S. 

Government solely for its official use or 

for carrying out any U.S. Government 

program with foreign governments or 

international organizations that is 

authorized by law and subject to control 

by the President by other means. This 

paragraph does not authorize a 

department or agency of the U.S. 

Government to make any export, 

reexport, or transfer that is otherwise 

prohibited by other administrative 

provisions or by statute. Contractor 

support personnel of a department or 

agency of the U.S. Government are 

eligible for this authorization when in 

the performance of their duties pursuant 

to the applicable contract or other 

official duties. ‘Contractor support 

personnel’ for the purpose of this 

provision means those persons who 

provide administrative, managerial, 

scientific or technical support under 

contract to a U.S. Government 

department or agency (e.g., contractor 

employees of Federally Funded 

Research Facilities or Systems 

Engineering and Technical Assistance 

contractors). This authorization is not 

available when a department or agency 

of the U.S. Government acts as a 

transmittal agent on behalf of a non-U.S. 

Government person, either as a 

convenience or in satisfaction of 

security requirements. 

(iii) Exports, reexports, and transfers 

(in-country) made for or on behalf of a 

department or agency of the U.S. 

Government. 

(A) This paragraph authorizes exports, 

reexports, and transfers (in-country) of 

items solely for use by a department or 

agency of the U.S. Government, when: 

(1) The items are destined to a U.S. 

person; and 

(2) The item is exported, reexported, 

or transferred (in-country) pursuant to a 

contract between the exporter and a 

department or agency of the U.S. 

Government; 

(B) This paragraph authorizes exports, 

reexports, and transfers (in-country) of 

items to implement or support any U.S. 

Government cooperative program, 

project, agreement, or arrangement with 

a foreign government or international 

organization or agency that is 

authorized by law and subject to control 

by the President by other means, when: 

(1) The agreement is in force and in 

effect, or the arrangement is in 

operation; 

(2) The exporter, reexporter, or 

transferor obtains a written 

authorization from the Secretary or 

agency head of the U.S. Government 

department or agency responsible for 

the program, agreement, or arrangement, 

or his or her designee, authorizing the 

exporter, reexporter, or transferor to use 

this license exception. The written 

authorization must include the scope of 

items to be shipped under this license 

exception; the end users and consignees 

of the items; and any restrictions on the 

export, reexport, or transfer (in-country) 

(including any restrictions on the 

foreign release of technology); 

(3) The exporter, reexporter, or 

transferor has a contract with a 

department or agency of the U.S. 

Government for the provision of the 

items in furtherance of the agreement, or 

arrangement; and 

(4) The items being exported, 

reexported, or transferred (in-country) 

are not controlled for Chemical 

Weapons Convention (CW) or 

proliferation of chemical and biological 

weapons (CB) reasons; 

(C) This paragraph authorizes the 

temporary export, reexport, or transfer 

(in-country) of an item in support of any 

foreign assistance or sales program 

authorized by law and subject to the 

control of the President by other means, 

when: 

(1) The item is provided pursuant to 

a contract between the exporter, 

reexporter, or transferor and a 

department or agency of the U.S. 

Government; and 

(2) The exporter, reexporter, or 

transferor obtains a written 

authorization from the Secretary or 

agency head of the U.S. Government 

department or agency responsible for 

the program, or his or her designee, 

authorizing the exporter, reexporter, or 

transferor to use this license exception. 

The written authorization must include 

the scope of items to be shipped under 

this license exception; the end users and 

consignees of the items; and any 

restrictions on the export, reexport, or 

transfer (in-country) (including any 

restrictions on the foreign release of 

technology); 

(D) This paragraph authorizes the 

export, reexport, or transfer of 

commodities or software at the direction 

of the U.S. Department of Defense for an 

end use in support of an Acquisition 

and Cross Servicing Agreement (ACSA), 

when: 

(1) The ACSA is between the U.S. 

Government and a foreign government 

or an international organization and is 

in force and in effect; 

(2) The exporter, reexporter, or 

transferor has a contract with the 

department or agency of the U.S. 

government in furtherance of the ACSA; 

and 

(3) The exporter, reexporter, or 

transferor obtains a written 

authorization from the Secretary or 

agency head of the U.S. Government 

department or agency responsible for 

the ACSA, or his or her designee, 

authorizing the exporter, reexporter, or 

transferor to use this license exception. 

The written authorization must include 

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22716 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

the scope of items to be shipped under 

this license exception; the end-users 

and consignees of the items; and any 

restrictions on the export, reexport, or 

transfer (in-country); 

(E) This paragraph authorizes the 

export, reexport, or transfer (in-country) 

of Government Furnished Equipment 

(GFE) made by a U.S. Government 

contractor, when: 

(1) The GFE will not be provided to 

any foreign person; 

(2) The export, reexport, or transfer 

(in-country) is pursuant to a contract 

with a department or agency of the U.S. 

Government; and 

(3) Shipment documents must include 

the following statement: ‘‘Property of 

[insert U.S. Government department, 

agency, or service]. Property may not 

enter the trade of the country to which 

it is shipped. Authorized under License 

Exception GOV. U.S. Government point 

of contact: [Insert name and telephone 

number].’’ 

(F) Electronic Export Information. 

Electronic Export Information (EEI) 

must be filed in the Automated Export 

System (AES) for any export made 

pursuant to paragraph (b)(iii) of this 

section. The EEI must identify License 

Exception GOV as the authority for the 

export and indicate that the applicant 

has received the relevant documentation 

from the contracting U.S. Government 

department, agency, or service. The 

Internal Transaction Number assigned 

by AES must be properly annotated on 

shipping documents (bill of lading, 

airway bill, other transportation 

documents, or commercial invoice). 

(G) The exporter, reexporter, or 

transferor must obtain an authorization, 

if required, before any item previously 

exported, reexported, or transferred (incountry) under this paragraph is resold, 

transferred, reexported, transshipped, or 

disposed of to an end user for any end 

use, or to any destination other than as 

authorized by this paragraph (e.g., 

property disposal of surplus items 

outside of the United States), unless: 

(1) The transfer is pursuant to a grant, 

sale, lease, loan, or cooperative project 

under the Arms Export Control Act or 

the Foreign Assistance Act of 1961, as 

amended; or 

(2) The item has been destroyed or 

rendered useless beyond the possibility 

of restoration. 

(iv) Items exported at the direction of 

the U.S. Department of Defense. This 

paragraph authorizes items to be 

exported, reexported, or transferred (incountry) pursuant to an official written 

request or directive from the U.S. 

Department of Defense. 

(v) This paragraph authorizes items 

sold, leased, or loaned by the U.S. 

Department of Defense to a foreign 

country or international organization 

pursuant to the Arms Export Control 

Act or the Foreign Assistance Act of 

1961 when the items are delivered to 

representatives of such a country or 

organization in the United States and 

exported, reexported, or transferred on a 

military aircraft or naval vessel of that 

government or organization or via the 

Defense Transportation Service. 

(vi) This paragraph authorizes transfer 

of technology in furtherance of a 

contract between the exporter and an 

agency of the U.S. Government, if the 

contract provides for such technology 

and the technology is not 

‘‘development’’ or ‘‘production’’ 

technology for ‘‘600 series’’ items. 

(c) Cooperating Governments. (1) 

Scope. The provisions of this paragraph 

(c) authorize exports reexports, and 

transfers (in-country) of the items listed 

in paragraph (c)(2) of this section to 

agencies of cooperating governments. 

‘‘Agency of a cooperating government’’ 

includes all civilian and military 

departments, branches, missions, and 

other governmental agencies of a 

cooperating national government. 

Cooperating governments are the 

national governments of countries listed 

in Country Group A:1 (see Supplement 

No. 1 to this part) and the national 

governments of Argentina, Austria, 

Finland, Hong Kong, Ireland, Korea 

(Republic of), New Zealand, Singapore, 

Sweden, Switzerland and Taiwan. 

(2) Eligibility. (i) Items for official use 

within national territory by agencies of 

cooperating governments. This license 

exception is available for all items 

consigned to and for the official use of 

any ‘agency of a cooperating 

government’ within the territory of any 

cooperating government, except items 

excluded by paragraph (c)(3) of this 

section. 

(ii) Diplomatic and consular missions 

of a cooperating government. This 

license exception is available for all 

items consigned to and for the official 

use of a diplomatic or consular mission 

of a cooperating government located in 

any country in Country Group B (see 

Supplement No. 1 to this part), except 

items excluded by paragraph (c)(3) of 

this section. 

(3) Exclusions. The following items 

may not be exported, reexported, or 

transferred (in-country) under this 

paragraph (c): 

(i) Items on the Sensitive List (see 

Supplement No. 6 to part 774 of the 

EAR), except to the countries listed in 

Country Group A:5 (see Supplement 

No.1 to this part); 

(ii) Items on the Very Sensitive List 

(see Supplement No. 7 to part 774 of the 

EAR); 

(iii) Encryption items controlled for EI 

reasons under ECCNs 5A002, 5D002, or 

5E002 (see § 740.17 of the EAR for 

License Exception ENC); 

(iv) Regional stability items controlled 

under ECCNs 6A002.a.1.c, 6E001 

‘‘technology’’ according to the General 

Technology Note for the ‘‘development’’ 

of equipment in 6A002.a.1.c, and 6E002 

‘‘technology’’ according to the General 

Technology Note for the ‘‘production’’ 

of equipment in 6A002.a.1.c.; 

(v) ‘‘600 series’’ items, except to the 

countries listed in Country Group A:5 

(see Supplement No. 1 to this part); 

(vi) Items controlled for nuclear 

nonproliferation (NP) reasons; 

(vii) Items listed as not eligible for 

License Exception STA in 

§ 740.20(b)(2)(ii) of the EAR. 

(d) International inspections under 

the Chemical Weapons Convention 

(CWC or Convention). (1) The 

Organization for the Prohibition of 

Chemical Weapons (OPCW) is an 

international organization that 

establishes and administers an 

inspection and verification regime 

under the Convention designed to 

ensure that certain chemicals and 

related facilities are not diverted from 

peaceful purposes to non-peaceful 

purposes. This paragraph (d) authorizes 

exports and reexports to the OPCW and 

exports and reexports by the OPCW for 

official international inspection and 

verification use under the terms of the 

Convention as follows: 

(i) Commodities and software 

consigned to the OPCW at its 

headquarters in The Hague for official 

international OPCW use for the 

monitoring and inspection functions set 

forth in the Convention, and technology 

relating to the maintenance, repair, and 

operation of such commodities and 

software. The OPCW must maintain 

‘‘effective control’’ of such commodities, 

software and technology. 

(ii) Controlled technology relating to 

the training of the OPCW inspectorate. 

(iii) Controlled technology relating to 

a CWC inspection site, including 

technology released as a result of: 

(A) Visual inspection of U.S.-origin 

equipment or facilities by foreign 

nationals of the inspection team; 

(B) Oral communication of controlled 

technology to foreign nationals of the 

inspection team in the U.S. or abroad; 

and 

(C) The application to situations 

abroad of personal knowledge or 

technical experience acquired in the 

U.S. 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22717 

(2) Exclusions. The following items 

may not be exported or reexported 

under the provisions of this paragraph 

(d): 

(i) Inspection samples collected in the 

U.S. pursuant to the Convention; 

(ii) Commodities and software that are 

no longer in OPCW official use. Such 

items must be transferred in accordance 

with the EAR. 

(iii) ‘‘600 series’’ items, except to the 

countries listed in Country Group A:5 

(see Supplement No.1 to this part). 

(3) Confidentiality. The application of 

the provisions of this paragraph (d) is 

subject to the condition that the 

confidentiality of business information 

is strictly protected in accordance with 

applicable provisions of the EAR and 

other U.S. laws regarding the use and 

transfer of U.S. goods and services. 

(4) Restrictions. Without prior 

authorization from the Bureau of 

Industry and Security, nationals of 

countries in Country Group E:1 (see 

Supplement No. 1 to this part) may not 

physically or computationally access 

computers that have been enhanced by 

‘‘electronic assemblies,’’ which have 

been exported or reexported under 

License Exception GOV and have been 

used to enhance such computers by 

aggregation of processors so that the 

APP of the aggregation exceeds the APP 

parameter set forth in ECCN 4A003.b. 

(e) International Space Station (ISS). 

(1) Scope. The ISS is a research facility 

in a low-Earth orbit approximately 190 

miles (350 km) above the surface of the 

Earth. The ISS is a joint project among 

the space agencies of the United States, 

Russia, Japan, Canada, Europe and Italy. 

This paragraph (e) authorizes exports 

and reexports required on short notice 

of certain commodities subject to the 

EAR that are classified under ECCN 

9A004 to launch sites for supply 

missions to the ISS. 

(2) Eligible commodities. Any 

commodity subject to the EAR that is 

classified under ECCN 9A004 and that 

is required for use on the ISS on short 

notice. 

Note 1 to paragraph (e)(2): This license 

exception is not available for the export or 

reexport of ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ to overseas 

manufacturers for the purpose of 

incorporation into other items destined for 

the ISS. 

Note 2 to paragraph (e)(2): For purposes of 

this paragraph (e), ‘short notice’ means the 

exporter is required to have a commodity 

manifested and at the scheduled launch site 

for hatch-closure (final stowage) no more 

than forty-five (45) days from the time the 

exporter or reexporter received complete 

documentation. ‘Complete documentation’ 

means the exporter or reexporter received the 

technical description of the commodity and 

purpose for use of the commodity on the ISS. 

‘Hatch-closure (final stowage)’ means the 

final date specified by a launch provider by 

which items must be at a specified location 

in a launch country in order to be included 

on a mission to the ISS. The exporter or 

reexporter must receive the notification to 

supply the commodity for use on the ISS in 

writing. That notification must be kept in 

accordance with paragraph (e)(8) of this 

section and the Recordkeeping requirements 

in part 762 of the EAR. 

(3) Eligible destinations. Eligible 

destinations are France, Japan, 

Kazakhstan, and Russia. To be eligible, 

a destination needs to have a launch for 

a supply mission to the ISS scheduled 

by a country participating in the ISS. 

(4) Requirement for commodities to be 

launched on an eligible space launch 

vehicle (SLV). Only commodities that 

will be delivered to the ISS using 

United States, Russian, ESA (French), or 

Japanese space launch vehicles (SLVs) 

are eligible under this authorization. 

Commodities to be delivered to the ISS 

using SLVs from any other countries are 

excluded from this authorization. 

(5) Authorizations. (i) Authorization 

to retain commodity at or near launch 

site for up to six months. If there are 

unexpected delays in a launch schedule 

for reasons such as mechanical failures 

in a launch vehicle or weather, 

commodities exported or reexported 

under this paragraph (e) may be retained 

at or near the launch site for a period 

of six (6) months from the time of initial 

export or reexport before the 

commodities must be destroyed, 

returned to the exporter or reexporter, or 

be the subject of an individually 

validated license request submitted to 

BIS to authorize further disposition of 

the commodities. 

(ii) Authorization to retain commodity 

abroad at launch country beyond six 

months. If, after the commodity is 

exported or reexported under this 

authorization, a delay occurs in the 

launch schedule that would exceed the 

6-month deadline in paragraph (e)(5)(i) 

of this section, the exporter or 

reexporter or the person in control of 

the commodities in the launch country 

may request a one-time 6-month 

extension by submitting written 

notification to BIS requesting a 6-month 

extension and noting the reason for the 

delay. If the requestor is not contacted 

by BIS within 30 days from the date of 

the postmark of the written notification 

and if the notification meets the 

requirements of this subparagraph, the 

request is deemed granted. The request 

must be sent to BIS at the address listed 

in part 748 of the EAR and should 

include the name and address of the 

exporter or reexporter, the name and 

address of the person who has control 

of the commodity, the date the 

commodities were exported or 

reexported, a brief product description, 

and the justification for the extension. 

To retain a commodity abroad beyond 

the 6-month extension period, the 

exporter, reexporter or person in control 

of the commodity must request 

authorization by submitting a license 

application in accordance with §§ 748.1, 

748.4 and 748.6 of the EAR to BIS 90 

days prior to the expiration of the 6- 

month extension period. 

(iii) Items not delivered to the ISS 

because of a failed launch. If the 

commodities exported or reexported 

under this paragraph (e) of this section 

are not delivered to the ISS because a 

failed launch causes the destruction of 

the commodity prior to its being 

delivered, exporters and reexporters 

must make note of the destruction of the 

commodities in accordance with the 

recordkeeping requirements under 

paragraph (e)(8)(ii) of this section and 

part 762 of the EAR. 

(6) Reexports to an alternate launch 

country. If a mechanical or weather 

related issue causes a change from the 

scheduled launch country to another 

foreign country after a commodity was 

exported or reexported, then that 

commodity may be subsequently 

reexported to the new scheduled launch 

country, provided all of the terms and 

conditions of paragraph (e) of this 

section are met, along with any other 

applicable EAR provisions. In such 

instances, the 6-month time limitation 

described in paragraph (e)(5)(i) of this 

section would start over again at the 

time of the subsequent reexport 

transaction. Note that if the subsequent 

reexport may be made under the 

designation No License Required (NLR) 

or pursuant to an authorization under 

the EAR, a reexporter does not need to 

rely on the provisions contained in this 

paragraph (e). 

(7) Eligible recipients. Only persons 

involved in the launch of commodities 

to the ISS may receive and have access 

to commodities exported or reexported 

pursuant to this paragraph (e), except 

that: 

(i) No commodities may be exported, 

reexported, or transferred (in-country) 

under paragraph (e) to any national of 

an E:1 country (see Supplement No. 1 to 

this part), and 

(ii) No person may receive 

commodities authorized under 

paragraph (e) of this section who is 

subject to an end-user or end-use 

control described in part 744 of the 

EAR, including the entity list in 

Supplement No. 4 to part 744. 

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22718 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

(8) Recordkeeping requirements. 

Exporters and reexporters must 

maintain records regarding exports or 

reexports made using this paragraph (e) 

of this section as well as any other 

applicable recordkeeping requirements 

under part 762 of the EAR. 

(i) Exporters and reexporters must 

retain a record of the initial written 

notification they received requesting 

these commodities be supplied on short 

notice for a supply mission to the ISS, 

including the date the exporter or 

reexporter received complete 

documentation (i.e., the day on which 

the 45-day clock begins). 

(ii) Exporters and reexporters must 

maintain records of the date of any 

exports or reexports made using this 

paragraph (e) and the date on which the 

commodities were launched into space 

for delivery to the ISS. If the 

commodities are not delivered to the 

ISS because of a failed launch whereby 

the item is destroyed prior to being 

delivered to the ISS, this must be noted 

for recordkeeping purposes. 

(iii) The return or destruction of 

defective or worn out parts or 

components is not required. However, if 

defective or worn out parts or 

components originally exported or 

reexported pursuant to this paragraph 

(e) are returned from the ISS, then those 

parts and components may be either: 

returned to the original country of 

export or reexport; destroyed; or 

reexported or transferred (in-country) to 

a destination that has been designated 

by NASA for conducting a review and 

analysis of the defective or worn part or 

component. Documentation for this 

activity must be kept for recordkeeping 

purposes. No commodities that are 

subject to the EAR may be returned, 

under the provisions of this paragraph, 

to a country listed in Country Group E:1 

(see Supplement No. 1 to this part) or 

to any person if that person is subject to 

an end-user or end-use control 

described in part 744 of the EAR. For 

purposes of paragraph (e) of this section, 

a ‘defective or worn out’ part or 

component is a part or component that 

no longer performs its intended 

function. 

■ 24. Section 740.13 is amended by 

adding a sentence to the end of 

paragraph (a)(1), redesignating 

paragraph (f) as paragraph (h), and by 

adding new paragraphs (f) and (g) to 

read as follows: 

§ 740.13 Technology and Software— 

Unrestricted (TSU). 

(a) * * * This paragraph (a) 

authorizes training, provided the 

training is limited to the operation, 

maintenance and repair technology 

identified in this paragraph. 

* * * * * 

(f) Release of technology and source 

code in the U.S. by U.S. universities to 

their bona fide and full time regular 

employees. (1) Scope. This paragraph 

authorizes the release in the United 

States of ‘‘technology’’ and source code 

that is subject to the EAR by U.S. 

universities to foreign nationals who are 

their bona fide and full time regular 

employees. 

(2) Eligible foreign nationals (i.e., 

bona fide and full time regular 

employees of U.S. universities). This 

exception is only available if: 

(i) The employee’s permanent 

residence throughout the period of 

employment is in the U.S.; 

(ii) The employee is not a national of 

a destination listed in Country Group 

D:5 (see Supplement No. 1 to part 740 

of the EAR); and 

(iii) The university informs the 

individual in writing that the 

‘‘technology’’ or source code may not be 

transferred to other foreign nationals 

without prior U.S. Government 

authorization. The obligation not to 

transfer technology extends beyond the 

tenure of employment at the university. 

(3) Regular employee. A regular 

employee means: 

(i) An individual permanently and 

directly employed by the university; or 

(ii) An individual in a long-term 

contractual relationship with the 

university where the individual works 

at the university’s facilities; works 

under the university’s direction and 

control; works full time and exclusively 

for the university; executes 

nondisclosure certifications for the 

university; and where the staffing 

agency that has seconded the individual 

has no role in the work the individual 

performs (other than providing that 

individual for that work) and the 

staffing agency would not have access to 

any controlled technology (other than 

where specifically authorized by a 

license or where a license exception is 

available). 

(4) Exclusions. (i) No ‘‘technology’’ or 

source code may be released to a foreign 

national who is subject to a part 744 

end-use or end-user control or where 

the release would otherwise be 

inconsistent with part 744; and 

(ii) No ‘‘technology’’ controlled for 

‘‘EI’’ (encryption) reasons or 

‘‘technology’’ or source code controlled 

for ‘‘MT’’ (Missile Technology) reasons 

may be released under this paragraph 

(f). 

(g) Copies of technology previously 

authorized for export to same recipient. 

This paragraph authorizes the export, 

reexport, or transfer (in-country) of 

copies of technology previously 

authorized for export, reexport, or 

transfer (in-country) to the same 

recipient. This paragraph also 

authorizes the export, reexport, or 

transfer (in-country) of revised copies of 

such technology provided the following 

three conditions are met: 

(1) The item that the technology 

pertains to is the identical item; 

(2) The revisions to the technology are 

solely editorial and do not add to the 

content of technology previously 

exported, reexported, or transferred (incountry) or authorized for export, 

reexport, or transfer (in-country) to the 

same recipient; and 

(3) The exporter, reexporter, or 

transferor has no reason to believe the 

same recipient has used the technology 

in violation of the original 

authorization. 

* * * * * 

■ 25. Section 740.20 is amended by: 

■ a. Revising paragraph (a); 

■ b. Removing the phrase ‘‘destinations 

indicated in paragraph (c)(1) of this 

section’’ and adding in its place 

‘‘destinations indicated in Country 

Group A:5 (See Supplement No.1 to this 

part)’’ in paragraph (b)(2)(vi); 

■ c. Adding paragraph (b)(3); 

■ d. Revising paragraphs (c)(1) and (2); 

■ e. Adding three sentences 

immediately following the first sentence 

of paragraph (d)(2); 

■ f. Removing the word ‘‘and’’ that 

follows the semicolon at the end of 

paragraph (d)(2)(v); 

■ g. Adding paragraphs (d)(2)(vi), 

(d)(2)(vii)) and (g); and 

■ h. Removing the phrase ‘‘country 

listed in paragraph (c)(1) or (c)(2) of this 

section’’ and adding in its place 

‘‘country listed in Country Group A:5 or 

A:6 (See Supplement No.1 to this part)’’ 

in paragraph (d)(4). 

The revisions and additions read as 

follows: 

§ 740.20 License Exception Strategic 

Trade Authorization (STA). 

(a) Introduction. This section 

authorizes exports, reexports, and 

transfers (in-country), including releases 

within a single country of software 

source code and technology to foreign 

nationals, in lieu of a license that would 

otherwise be required pursuant to part 

742 of the EAR. 

(b) * * * 

(3) Limitations on the Use of STA that 

are Specific to ‘‘600 series’’ Items. (i) 

License Exception STA may not be used 

for any ‘‘600 series’’ items identified in 

the relevant ECCN as not being eligible 

for STA. 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22719 

(ii) License Exception STA may be 

used to export, reexport, and transfer 

(in-country) ‘‘600 series’’ items to 

persons, whether non-governmental or 

governmental, if they are in and, for 

natural persons, nationals of a country 

listed in Country Group A:5 (See 

Supplement No.1 to part 740 of the 

EAR) or the United States and if: 

(A) The ultimate end user for such 

items is the armed forces, police, 

paramilitary, law enforcement, customs, 

correctional, fire, or a search and rescue 

agency of a government of one of the 

countries listed in Country Group A:5, 

or the United States Government; 

(B) For the ‘‘development,’’ 

‘‘production,’’ operation, installation, 

maintenance, repair, overhaul, or 

refurbishing of an item in one of the 

countries listed in Country Group A:5 or 

the United States that will ultimately be 

used by any such government agencies, 

the United States Government, or a 

person in the United States; or 

(C) The United States Government has 

issued a license that authorizes the use 

of License Exception STA, the license is 

in effect, and the consignee provides a 

copy of such authorization to the 

exporter. 

(iii) License Exception STA may not 

be used to export, reexport, or transfer 

(in-country) end items described in 

ECCN 9A610.a until after BIS has 

approved their export under STA under 

the procedures set out in § 740.20(g). 

(iv) License Exception STA may not 

be used to export, reexport, or transfer 

(in-country) ‘‘600 series’’ items if they 

are ‘‘600 Series Major Defense 

Equipment’’ and the value of such items 

in the contract requiring their export 

exceeds $25,000,000. 

(c) Authorizing paragraphs—(1) 

Multiple reasons for control. Exports, 

reexports, and transfers (in-country) in 

which the only applicable reason(s) for 

control is (are) national security (NS); 

chemical or biological weapons (CB); 

nuclear nonproliferation (NP); regional 

stability (RS); crime control (CC), and/ 

or significant items (SI) are authorized 

for destinations in or nationals of 

Country Group A:5 (See Supplement 

No.1 to part 740 of the EAR). 

Note to paragraph (c)(1). License 

Exception STA under § 740.20(c)(1) may be 

used to authorize the export, reexport, or 

transfer (in-country) of ‘‘600 series’’ items 

only if the purchaser, intermediate 

consignee, ultimate consignee, and end user 

have previously been approved on a license 

issued by BIS or the Directorate of Defense 

Trade Controls (DDTC), U.S. Department of 

State. 

(2) Controls of lesser sensitivity. 

Exports, reexports and transfers (incountry) in which the only applicable 

reason for control is national security 

(NS) and the item being exported, 

reexported or transferred (in-country) is 

not designated in the STA paragraph in 

the License Exception section of the 

ECCN that lists the item are authorized 

for destinations in or nationals of 

Country Group A:6 (See Supplement 

No.1 to this part). 

* * * * * 

(d) * * * 

(1) * * * 

(2) Prior consignee statement. * * * 

Paragraphs (d)(2)(i) through (v) of this 

section are required for all transactions. 

In addition, paragraph (d)(2)(vi) is 

required for all transactions in ‘‘600 

series’’ items and paragraph (vii) of this 

section is required for transactions in 

‘‘600 series’’ items if the consignee is 

not the government of a country listed 

in Country Group A:5 (See Supplement 

No. 1 to part 740 of the EAR). 

* * * * * 

(vi) Understands that License 

Exception STA may be used to export, 

reexport, and transfer (in-country) ‘‘600 

series’’ items to persons, whether nongovernmental or governmental, only if 

they are in and, for natural persons, 

nationals of a country listed in Country 

Group A:5 (See Supplement No.1 to part 

740 of the EAR) or the United States and 

if: 

(A) The ultimate end user for such 

items is the armed forces, police, 

paramilitary, law enforcement, customs, 

correctional, fire, or a search and rescue 

agency of a government of one of the 

countries listed in Country Group A:5 or 

the United States Government; 

(B) For the ‘‘development,’’ 

‘‘production,’’ operation installation, 

maintenance, repair, overhaul, or 

refurbishing of an item in one of the 

countries listed in Country Group A:5 or 

the United States that will ultimately be 

used by any such government agencies, 

the United States Government, or a 

person in the United States; or 

(C) A United States Government 

license authorizes the use of License 

Exception STA, the license is in effect, 

and is attached to the consignee 

statement. 

(vii) Agrees to permit a U.S. 

Government end-use check with respect 

to the items. 

* * * * * 

(g) License Exception STA eligibility 

requests for ‘‘600 series’’ end items. (1) 

Applicability. Any person may request 

License Exception STA eligibility for 

aircraft described in ECCN 9A610.a. 

(2) Required information and manner 

of requests. Requests for License 

Exception STA eligibility must be made 

via the BIS Simplified Network 

Application Process–Redesign 

(SNAP–R) system unless BIS authorizes 

submission via the paper BIS–748–P 

Multipurpose Application form. For 

situations in which BIS 748–P 

submissions may be authorized, see 

§ 748.1(d)(1). For required information 

specific to License Exception STA 

eligibility requests, see Supplement No. 

1 to part 748, Blocks 5 and 6 and 

Supplement No. 2 to part 748, 

paragraph (w). In SNAP–R the work 

type for these applications is ‘‘Export.’’ 

(3) Timeline for USG review. The 

Departments of Commerce, Defense and 

State will review License Exception 

STA eligibility requests in accordance 

with the timelines set forth in Executive 

Order 12981 and § 750.4. If the License 

Exception STA request is approved, the 

process outlined in paragraph (g)(5)(i) of 

this section is followed. 

(4) Review criteria. The Departments 

of Commerce, Defense and State will 

determine whether the ‘‘end item’’ is 

eligible for this license exception based 

on an assessment of whether it provides 

a critical military or intelligence 

advantage to the United States or is 

otherwise available in countries that are 

not regime partners or close allies. If the 

‘‘end item’’ does not provide a critical 

military or intelligence advantage to the 

United States or is otherwise available 

in countries that are not regime partners 

or close allies, the Departments will 

determine that License Exception STA 

is available unless an overarching 

foreign policy rationale for restricting 

STA availability can be articulated. 

Consensus among the Departments is 

required in order for an ‘‘end item’’ to 

be eligible for License Exception STA. 

Such determinations are made by the 

departments’ representatives to the 

Advisory Committee on Export Policy 

(ACEP), or their designees. 

(5) Disposition of License Exception 

STA eligibility requests. (i) Approvals. If 

the request for STA eligibility is 

approved, the applicant will receive 

notification from BIS authorizing the 

use of the additional License Exception 

STA for the specific end items 

requested. This will be in the form of a 

notice generated by SNAP–R to the 

applicant. Applicants who receive an 

approval notification may share it with 

companies affiliated with them, such as 

a branch or distributor, and may also 

take steps to make it public (e.g., on 

their Web site) if the applicants so wish. 

In addition, BIS will add a description 

of the approved end item in the relevant 

ECCN and in an online table posted on 

the BIS Web site, which removes the 

restriction on the use of License 

Exception STA for the end item 

identified in the approved request. BIS 

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22720 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

will publish, as needed, a final rule 

adding this license exception eligibility 

to the EAR for that ECCN entry or end 

item. 

(ii) Denials. If the STA eligibility 

request is not approved, the applicant 

will receive written notification from 

BIS. This will be in the form of a notice 

generated by SNAP–R to the applicant. 

Applicants may re-submit STA 

eligibility requests at any time. 

■ 26. Supplement No. 1 to part 740, 

Country Group A is amended by: 

■ a. Adding two columns A:5 and A:6 

to the right of column A:4; and 

■ b. Adding rows for: Albania, Israel, 

Singapore, and Taiwan, in alphabetic 

order, to read as follows: 

******* [A:5] [A:6] 

Albania ..................................................................................................................................................... ******* .................... X 

Argentina .................................................................................................................................................. ******* X ....................

Australia ................................................................................................................................................... ******* X ....................

Austria 1 .................................................................................................................................................... ******* X ....................

Belarus ..................................................................................................................................................... ******* .................... ....................

Belgium .................................................................................................................................................... ******* X ....................

Brazil ........................................................................................................................................................ ******* .................... ....................

Bulgaria .................................................................................................................................................... ******* X ....................

Canada .................................................................................................................................................... ******* X ....................

Croatia ..................................................................................................................................................... ******* X ....................

Cyprus ...................................................................................................................................................... ******* .................... ....................

Czech Republic ........................................................................................................................................ ******* X ....................

Denmark .................................................................................................................................................. ******* X ....................

Estonia ..................................................................................................................................................... ******* X ....................

Finland 1 ................................................................................................................................................... ******* X ....................

France ...................................................................................................................................................... ******* X ....................

Germany .................................................................................................................................................. ******* X ....................

Greece ..................................................................................................................................................... ******* X ....................

Hong Kong 1 ............................................................................................................................................. ******* .................... X 

Hungary ................................................................................................................................................... ******* X ....................

Iceland ..................................................................................................................................................... ******* X ....................

India ......................................................................................................................................................... ******* .................... X 

Ireland 1 .................................................................................................................................................... ******* X ....................

Israel ........................................................................................................................................................ ******* .................... X 

Italy .......................................................................................................................................................... ******* X ....................

Japan ....................................................................................................................................................... ******* X ....................

Kazakhstan .............................................................................................................................................. ******* .................... ....................

Korea, South 1 .......................................................................................................................................... ******* X ....................

Latvia ....................................................................................................................................................... ******* X ....................

Lithuania .................................................................................................................................................. ******* X ....................

Luxembourg ............................................................................................................................................. ******* X ....................

Malta ........................................................................................................................................................ ******* .................... X 

Netherlands .............................................................................................................................................. ******* X ....................

New Zealand 1 ......................................................................................................................................... ******* X ....................

Norway ..................................................................................................................................................... ******* X ....................

Poland ...................................................................................................................................................... ******* X ....................

Portugal .................................................................................................................................................... ******* X ....................

Romania ................................................................................................................................................... ******* X ....................

Russia ...................................................................................................................................................... ******* .................... ....................

Singapore ................................................................................................................................................. ******* .................... X 

Slovakia ................................................................................................................................................... ******* X ....................

Slovenia ................................................................................................................................................... ******* X ....................

South Africa ............................................................................................................................................. ******* .................... X 

Spain ........................................................................................................................................................ ******* X ....................

Sweden 1 .................................................................................................................................................. ******* X ....................

Switzerland 1 ............................................................................................................................................ ******* X ....................

Taiwan ..................................................................................................................................................... ******* .................... X 

Turkey ...................................................................................................................................................... ******* X ....................

Ukraine ..................................................................................................................................................... ******* .................... ....................

United Kingdom ....................................................................................................................................... ******* X ....................

United States ........................................................................................................................................... ******* .................... ....................

1 Cooperating Countries. 

■ 27. Supplement No. 1 to part 740, 

Country Group D is amended by: 

■ a. Adding column D:5 to the right of 

column D:4; and 

■ b. Adding rows, in alphabetical order, 

for: Congo (Democratic Republic of), 

Cote d’Ivoire, Cyprus, Eritrea, Fiji, Haiti, 

Liberia, Somalia, Sri Lanka, Sudan, 

Venezuela, and Zimbabwe, to read as 

follows: 

Country ******* [D:5] 

U.S. Arms 

Embargoed 

Countries1

Afghanistan ....... ******* X 

Armenia ............ ******* ....................

Azerbaijan ......... ******* ....................

Bahrain ............. ******* ....................

Belarus .............. ******* X 

Burma ............... ******* X 

Cambodia ......... ******* ....................

China (PRC) ..... ******* X 

Congo, Democratic Republic 

of ................... ******* X 

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Cote d’Ivoire ..... ******* X 

Cuba ................. ******* X 

Cyprus .............. ******* X 

Egypt ................. ******* ....................

Eritrea ............... ******* X 

Fiji ..................... ******* X 

Georgia ............. ******* ....................

Haiti ................... ******* X 

Iran .................... ******* X 

Iraq .................... ******* X 

Israel ................. ******* ....................

Jordan ............... ******* ....................

Kazakhstan ....... ******* ....................

Korea, North ..... ******* X 

Kuwait ............... ******* ....................

Kyrgyzstan ........ ******* ....................

Laos .................. ******* ....................

Lebanon ............ ******* X 

Liberia ............... ******* X 

Libya ................. ******* X 

Macau ............... ******* ....................

Moldova ............ ******* ....................

Mongolia ........... ******* ....................

Oman ................ ******* ....................

Pakistan ............ ******* ....................

Qatar ................. ******* ....................

Russia ............... ******* ....................

Saudi Arabia ..... ******* ....................

Somalia ............. ******* X 

Sri Lanka .......... ******* X 

Sudan ............... ******* X 

Syria .................. ******* X 

Taiwan .............. ******* ....................

Tajikistan ........... ******* ....................

Turkmenistan .... ******* ....................

Ukraine ............. ******* ....................

United Arab 

Emirates ........ ******* ....................

Uzbekistan ........ ******* ....................

Venezuela ......... ******* X 

Vietnam ............. ******* X 

Yemen .............. ******* ....................

Zimbabwe ......... ******* X 

1 Note to Country Group D:5: Countries subject to U.S. arms embargoes are identified by 

the State Department through notices published in the Federal Register. The list of 

arms embargoed destinations in this paragraph is drawn from 22 CFR § 126.1 and 

State Department Federal Register notices 

related to arms embargoes (compiled at http:// 

www.pmddtc.state.gov/embargoed_countries/ 

index.html) and will be amended when the 

State Department publishes subsequent notices. If there are any discrepancies between 

the list of countries in this paragraph and the 

countries identified by the State Department 

as subject to a U.S. arms embargo (in the 

Federal Register), the State Department’s list 

of countries subject to U.S. arms embargoes 

shall be controlling. 

PART 742—[AMENDED] 

■ 28. The authority citation for part 742 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 

42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 

U.S.C. 7210; Sec. 1503, Pub. L. 108–11, 117 

Stat. 559; E.O. 12058, 43 FR 20947, 3 CFR, 

1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 

3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 

FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Presidential Determination 

2003–23 of May 7, 2003, 68 FR 26459, May 

16, 2003; Notice of August 15, 2012, 77 FR 

49699 (August 16, 2012); Notice of November 

1, 2012, 77 FR 66513 (November 5, 2012). 

■ 29. Section 742.4 is amended by 

revising paragraph (b)(1), to read as 

follows: 

§ 742.4 National security. 

* * * * * 

(b) Licensing policy. (1)(i) The policy 

for national security controlled items 

exported or reexported to any country 

except a country in Country Group D:1 

(see Supplement No. 1 to part 740 of the 

EAR) is to approve applications unless 

there is a significant risk that the items 

will be diverted to a country in Country 

Group D:1. 

(ii) When destined to a country listed 

in Country Group D:5 in Supplement 

No. 1 to Part 740 of the EAR, however, 

items classified under ‘‘600 series’’ 

ECCNs will also be reviewed consistent 

with United States arms embargo 

policies (§ 126.1 of the ITAR). 

* * * * * 

■ 30. Section 742.6 is amended by: 

■ a. Revising paragraph (a)(1); 

■ b. Removing the phrase ‘‘9A018.a and 

.b, 9D018 (only software for the ‘‘use’’ 

of commodities in ECCN 9A018.a and 

.b), and 9E018 (only technology for the 

‘‘development’’, ‘‘production’’, or ‘‘use’’ 

of commodities in 9A018.a and .b)’’ and 

adding in its place ‘‘9A018.b, 9D018 

(only software for the ‘‘use’’ of 

commodities in ECCN 9A018.b), and 

9E018 (only technology for the 

‘‘development’’, ‘‘production’’, or ‘‘use’’ 

of commodities in 9A018.b)’’ at the end 

of paragraph (a)(4)(i); and 

■ c. Revising paragraph (b)(1). 

The revisions read as follows: 

§ 742.6 Regional stability. 

(a) * * * 

(1) RS Column 1 license requirements 

in general. A license is required for 

exports and reexports to all 

destinations, except Canada, for all 

items in ECCNs on the CCL that include 

RS Column 1 in the Country Chart 

column of the ‘‘License Requirements’’ 

section. Transactions described in 

paragraphs (a)(2) or (3) of this section 

are subject to the RS Column 1 license 

requirements set forth in those 

paragraphs rather than the license 

requirements set forth in this paragraph 

(a)(1). 

* * * * * 

(b) Licensing policy. (1) Applications 

for exports and reexports of ‘‘600 series’’ 

items will be reviewed on a case-by-case 

basis to determine whether the 

transaction is contrary to the national 

security or foreign policy interests of the 

United States. Other applications for 

exports and reexports described in 

paragraph (a)(1), (2), (6) or (7) of this 

section will be reviewed on a case-bycase basis to determine whether the 

export or reexport could contribute 

directly or indirectly to any country’s 

military capabilities in a manner that 

would alter or destabilize a region’s 

military balance contrary to the foreign 

policy interests of the United States. 

Applications for reexports of items 

described in paragraph (a)(3) of this 

section will be reviewed applying the 

policies for similar commodities that are 

subject to the ITAR. Applications for 

export or reexport of items classified 

under any ‘‘600 series’’ ECCN requiring 

a license in accordance with paragraph 

(a)(1) of this section will also be 

reviewed consistent with United States 

arms embargo policies (§ 126.1 of the 

ITAR) if destined to a country set forth 

in Country Group D:5 in Supplement 

No. 1 to part 740 of the EAR. 

Applications for export or reexport of 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

‘‘attachments,’’ ‘‘software,’’ or 

‘‘technology’’ ‘‘specially designed’’ or 

otherwise required for the F–14 aircraft 

will generally be denied. 

PART 743—SPECIAL REPORTING AND 

NOTIFICATION 

■ 31. The authority citation for part 743 

is revised to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; E.O. 13637 of 

March 8, 2013, 78 FR 16129 (March 13, 

2013); Notice of August 15, 2012, 77 FR 

49699 (August 16, 2012). 

■ 32. The heading for part 743 is revised 

to read as set forth above. 

■ 33. Section 743.1 is amended by 

adding two sentences at the end of 

paragraph (a) introductory text and by 

revising paragraph (c) to read as follows: 

§ 743.1 Wassenaar Arrangement. 

(a) * * * This section is limited to the 

Wassenaar Arrangement reporting 

requirements for items listed on the 

Wassenaar Arrangement’s Dual-Use list. 

For reporting requirements for 

conventional arms listed on the 

Wassenaar Arrangement Munitions List 

that are subject to the EAR (i.e., ‘‘600 

series’’ ECCNs), see § 743.4 of this part 

for Wassenaar Arrangement and United 

Nations reporting requirements. 

* * * * * 

(c) Items for which reports are 

required. You must submit reports to 

BIS under the provisions of this section 

only for exports of items on the 

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Sensitive List (see Supplement No. 6 to 

part 774 of the EAR). 

* * * * * 

■ 34. Add § 743.4 to read as follows: 

§ 743.4 Conventional arms reporting. 

(a) Scope. This section outlines 

special reporting requirements for 

exports of certain items listed on the 

Wassenaar Arrangement Munitions List 

and the UN Register of Conventional 

Arms. Participating States of the 

Wassenaar Arrangement exchange 

information every six months on 

deliveries to non-participating states of 

conventional arms set forth in the 

Wassenaar Arrangement’s Basic 

Documents under Part II Guideline and 

Procedures, including the Initial 

Elements, Appendix 3: Specific 

Information Exchange on Arms Content 

by Category (at www.wassenaar.org), 

derived from the categories of the UN 

Register of Conventional Arms (at 

www.un.org/disarmament/convarms/ 

Register/). Similar, although not 

identical, information is also reported 

by the U.S. Government to the United 

Nations on an annual basis. The 

reported information should include the 

quantity and the name of the recipient 

state and, except in the category of 

missiles and missile launchers, details 

of model and type. Such reports must be 

submitted to BIS semi-annually in 

accordance with the provisions of 

paragraph (f) of this section for items 

identified in paragraph (c)(1) and 

annually for items identified in 

paragraph (c)(2), and records of all 

exports subject to the reporting 

requirements of this section must be 

kept in accordance with part 762 of the 

EAR. This section does not require 

reports for reexports or transfers (incountry). 

Note to paragraph (a): For purposes of 

§ 743.4, the term ‘‘you’’ has the same 

meaning as the term ‘‘exporter’’, as defined 

in part 772 of the EAR. 

(b) Requirements. You must submit 

one electronic copy of each report 

required under the provisions of this 

section and maintain accurate 

supporting records (see § 762.2(b) of the 

EAR) for all exports of items specified 

in paragraph (c) of this section for the 

following: 

(1) Exports authorized under License 

Exceptions LVS, TMP, RPL, STA, or 

GOV (see part 740 of the EAR); 

(2) Exports authorized under the 

Special Comprehensive License 

procedure (see part 752 of the EAR); and 

(3) Exports authorized under the 

Validated End User authorization (see 

§ 748.15 of the EAR). 

(c) Items for which reports are 

required—. (1) Wassenaar Arrangement 

reporting. You must submit reports to 

BIS under the provisions of this section 

only for exports of items classified 

under the following ECCNs: 

(i) [Reserved] 

(ii) [Reserved] 

(2) United Nations reporting. You 

must submit reports to BIS under the 

provisions of this section only for 

exports of items classified under the 

following ECCNs: 

(i) [Reserved] 

(ii) [Reserved] 

(d) Country Exceptions for Wassenaar 

Arrangement reporting. You must report 

each export subject to the provisions of 

this section, except for exports to 

Wassenaar member countries, identified 

in Supplement No. 1 to part 743 for 

reports required under paragraph (c)(1) 

of this section. 

(e) Information that must be included 

in each report. (1) Each report submitted 

to BIS for items other than those 

identified in paragraph (e)(2) of this 

section must include the following 

information for each export during the 

time periods specified in paragraph (f) 

of this section: 

(i) Export Control Classification 

Number and paragraph reference as 

identified on the Commerce Control 

List; 

(ii) Number of units in the shipment; 

and 

Note to paragraph (e)(1)(ii): For exports of 

technology for which reports are required 

under § 743.1(c) of this section, the number 

of units in the shipment should be reported 

as one (1) for the initial export of the 

technology to a single ultimate consignee. 

Additional exports of the technology must be 

reported only when the type or scope of 

technology changes or exports are made to 

other ultimate consignees. 

(iii) Country of ultimate destination. 

(f) Frequency and timing of reports — 

(1) Semi-annual reports for items 

identified in paragraph (c)(1) of this 

section. You must submit reports 

subject to the provisions of this section 

semiannually. The reports must be 

labeled with the exporting company’s 

name and address at the top of each 

page and must include for each such 

export all the information specified in 

paragraph (e) of this section. The reports 

shall cover exports made during sixmonth time periods from January 1 

through June 30 and July 1 through 

December 31. 

(i) The first report must be submitted 

to and received by BIS no later than 180 

days after the effective date of the rule 

that revises paragraph (c)(1) of this 

section to add the ECCN for the item 

being reported. Thereafter, reports are 

due according to the provisions of 

paragraphs (f)(2) and (f)(3) of this 

section. 

(ii) Reports for the reporting period 

ending June 30 must be submitted to 

and received by BIS no later than 

August 1. 

(iii) Reports for the reporting period 

ending December 31 must be submitted 

to and received by BIS no later than 

February 1. 

(2) Annual reports for items identified 

in paragraph (c)(2) of this section. You 

must submit reports subject to the 

provisions of this section annually. The 

reports must be labeled with the 

exporting company’s name and address 

at the top of each page and must include 

for each such export all the information 

specified in paragraph (e) of this 

section. The reports shall cover exports 

made during twelve month time periods 

from January 1 through December 31. 

(i) The first report must be submitted 

to and received by BIS no later than 180 

days after the effective date of the rule 

that revises paragraph (c)(1) of this 

section to add the ECCN for the item 

being reported. Thereafter, reports are 

due according to the provisions of 

paragraph (f)(2) of this section. 

(ii) Reports for the reporting period 

ending December 31 must be submitted 

to and received by BIS no later than 

February 1. 

(g) Submission of reports. Information 

should be submitted in the form of a 

spreadsheet and emailed to 

WAreports@BIS.DOC.GOV or 

UNreports@BIS.DOC.GOV. 

(h) Contacts. General information 

concerning the Wassenaar Arrangement 

and reporting obligations thereof is 

available from the Office of National 

Security and Technology Transfer 

Controls, Tel. (202) 482–0092, Fax: (202) 

482–4094. 

■ 35. Section 743.5 is added to read as 

follows: 

§ 743.5 Prior notifications to Congress of 

Exports of ‘‘600 Series Major Defense 

Equipment.’’ 

(a) General requirement. Applications 

to export items on the Commerce 

Control List that are ‘‘600 Series Major 

Defense Equipment’’ will be notified to 

Congress as provided in this section 

before licenses for such items are 

issued. 

(1) Exports of ‘‘600 Series Major 

Defense Equipment’’ to U.S. 

Government end users under License 

Exception GOV (§ 740.11(b) of the EAR) 

do not require such notification. 

(2) Exports of ‘‘600 Series Major 

Defense Equipment’’ that have been or 

will be described in a notification filed 

by the U.S. State Department under the 

Arms Export Control Act do not require 

such notification by BIS. 

(b) BIS will notify Congress prior to 

issuing a license authorizing the export 

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of items to a country outside the 

countries listed in Country Group A:5 

(see Supplement No.1 to part 740 of the 

EAR) that are sold under a contract that 

includes $14,000,000 or more of ‘‘600 

Series Major Defense Equipment.’’ 

(c) BIS will notify Congress prior to 

issuing a license authorizing the export 

of items to a country listed in Country 

Group A:5 (see Supplement No.1 to part 

740 of the EAR) that are sold under a 

contract that includes $25,000,000 or 

more of ‘‘600 Series Major Defense 

Equipment.’’ 

(d) In addition to information 

required on the application, the exporter 

must include a copy of the signed 

contract (including a statement of the 

value of the ‘‘600 Series Major Defense 

Equipment’’ items to be exported under 

the contract) for any proposed export 

described in paragraphs (b) or (c) of this 

section. 

(e) Address. Munitions Control 

Division at bis.compliance@bis.doc.gov. 

PART 744—[AMENDED] 

■ 36. The authority citation for part 744 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 3201 et seq.; 

42 U.S.C. 2139a; 22 U.S.C. 7201 et seq.; 22 

U.S.C. 7210; E.O. 12058, 43 FR 20947, 3 CFR, 

1978 Comp., p. 179; E.O. 12851, 58 FR 33181, 

3 CFR, 1993 Comp., p. 608; E.O. 12938, 59 

FR 59099, 3 CFR, 1994 Comp., p. 950; E.O. 

12947, 60 FR 5079, 3 CFR, 1995 Comp., p. 

356; E.O. 13026, 61 FR 58767, 3 CFR, 1996 

Comp., p. 228; E.O. 13099, 63 FR 45167, 3 

CFR, 1998 Comp., p. 208; E.O. 13222, 66 FR 

44025, 3 CFR, 2001 Comp., p. 783; E.O. 

13224, 66 FR 49079, 3 CFR, 2001 Comp., p. 

786; Notice of January 19, 2012, 77 FR 3067 

(January 20, 2012); Notice of August 15, 

2012, 77 FR 49699 (August 16, 2012); Notice 

of September 11, 2012, 77 FR 56519 

(September 12, 2012); Notice of November 1, 

2012, 77 FR 66513 (November 5, 2012). 

■ 37. Section 744.17 is amended by 

revising the section heading and 

paragraph (d) to read as follows: 

§ 744.17 Restrictions on certain exports 

and reexports of general purpose 

microprocessors for ‘military end uses’ and 

to ‘military end users.’ 

* * * * * 

(d) Military end use. In this section, 

the phrase ‘military end use’ means 

incorporation into: a military item 

described on the U.S. Munitions List 

(USML) (22 CFR part 121, International 

Traffic in Arms Regulations) or the 

Wassenaar Arrangement Munitions List 

(as set out on the Wassenaar 

Arrangement Web site at http:// 

www.wassenaar.org); commodities 

classified under ECCNs ending in 

‘‘A018’’ or under ‘‘600 series’’ ECCNs; or 

any commodity that is designed for the 

‘‘use,’’ ‘‘development,’’ ‘‘production,’’ or 

deployment of military items described 

on the USML, the Wassenaar 

Arrangement Munitions List or 

classified under ECCNs ending in 

‘‘A018’’ or under ‘‘600 series’’ ECCNs. 

Supplement No. 1 of this part lists 

examples of ‘military end use.’ 

* * * * * 

■ 38. Section 744.21 is amended by 

redesignating paragraphs (a), (a)(1) and 

(a)(2) as paragraphs (a)(1), (a)(1)(i) and 

(a)(1)(ii), by adding a new paragraph 

(a)(2), and by revising paragraph (f) to 

read as follows: 

§ 744.21 Restrictions on certain ‘military 

end uses’ in the People’s Republic of China 

(PRC). 

(a)(1) * * * 

(2) General prohibition. In addition to 

the license requirements for ‘‘600 

series’’ items specified on the 

Commerce Control List (CCL), you may 

not export, reexport, or transfer any 

‘‘600 series’’ item, including .y items 

described in a ‘‘600 series’’ ECCN, to the 

PRC without a license. 

* * * * * 

(f) In this section, ‘military end use’ 

means: incorporation into a military 

item described on the U.S. Munitions 

List (USML) (22 CFR part 121, 

International Traffic in Arms 

Regulations); incorporation into a 

military item described on the 

Wassenaar Arrangement Munitions List 

(as set out on the Wassenaar 

Arrangement Web site at http:// 

www.wassenaar.org); incorporation into 

items classified under ECCNs ending in 

‘‘A018’’ or under ‘‘600 series’’ ECCNs; or 

for the ‘‘use,’’ ‘‘development,’’ or 

‘‘production’’ of military items 

described on the USML or the 

Wassenaar Arrangement Munitions List, 

or items classified under ECCNs ending 

in ‘‘A018’’ or under ‘‘600 series’’ ECCNs. 

* * * 

* * * * * 

PART 746—[AMENDED] 

■ 39. The authority citation for part 746 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 22 U.S.C. 287c; Sec 1503, 

Pub. L. 108–11, 117 Stat. 559; 22 U.S.C. 6004; 

22 U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 

12854, 58 FR 36587, 3 CFR, 1993 Comp., p. 

614; E.O. 12918, 59 FR 28205, 3 CFR, 1994 

Comp., p. 899; E.O. 13222, 3 CFR, 2001 

Comp., p. 783; E.O. 13338, 69 FR 26751, 3 

CFR 2004 Comp., p. 168; Presidential 

Determination 2003–23 of May 7, 2003, 68 

FR 26459, May 16, 2003; Presidential 

Determination 2007–7 of December 7, 2006, 

72 FR 1899 (January 16, 2007); Notice of May 

9, 2012, 77 FR 27559 (May 10, 2012); Notice 

of August 15, 2012, 77 FR 49699 (August 16, 

2012). 

■ 40. Section 746.1 is amended by 

revising paragraph (b)(4) to read as 

follows: 

§ 746.1 Introduction. 

* * * * * 

(b) * * * 

(4) You may not use any License 

Exception, other than License Exception 

GOV, for items for personal or official 

use by personnel and agencies of the 

U.S. Government or agencies of 

cooperating governments as set forth in 

§ 740.11(b) of the EAR, to export or 

reexport items with a UN reason for 

control to countries listed in paragraph 

(b)(2) of this section. This paragraph 

does not apply to Iraq, which is 

governed by § 746.3(c) of this part; 

North Korea, which is governed by 

§ 746.4(c) of this part; or Iran, which is 

governed by § 746.7(c) of this part. 

■ 41. Section 746.3 is amended by 

revising paragraph (b)(2) to read as 

follows: 

§ 746.3 Iraq. 

* * * * * 

(b) * * * 

(2) License applications for the export 

or reexport to Iraq or transfer within Iraq 

of machine tools controlled for national 

security (NS) or nuclear 

nonproliferation (NP) reasons, as well as 

for any items controlled for crime 

control (CC) or United Nations (UN) 

reasons (including items classified 

under ECCN 0A986) or ECCNs that end 

in the number ‘‘018’’ or items classified 

under ‘‘600 series’’ ECCNs, that would 

make a material contribution to the 

production, research, design, 

development, support, maintenance or 

manufacture of Iraqi weapons of mass 

destruction, ballistic missiles or arms 

and related materiel will be subject to a 

general policy of denial. Exports of ‘‘600 

series’’ items to the Government of Iraq 

will be reviewed under the policies set 

forth for such items in §§ 742.4(b) and 

742.6(b) of the EAR. 

* * * * * 

PART 748—[AMENDED] 

■ 42. The authority citation for part 748 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; Notice 

of August 15, 2012, 77 FR 49699 (August 16, 

2012). 

■ 43. In § 748.1, paragraph (d) 

introductory text is amended by revising 

the first sentence to read as follows: 

§ 748.1 General Provisions. 

* * * * * 

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22724 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

(d) Electronic Filing Required. All 

export and reexport license applications 

(other than Special Comprehensive 

License or Special Iraq Reconstruction 

License applications), encryption 

registrations, License Exception AGR 

notifications, requests to authorize use 

of License Exception STA for ‘‘600 

series’’ end items (which are currently 

submitted as export license 

applications) and classification requests 

and their accompanying documents 

must be filed via BIS’s Simplified 

Network Application Processing system 

(SNAP–R), unless BIS authorizes 

submission via the paper forms BIS 

748–P (Multipurpose Application 

Form), BIS–748P–A (Item Appendix) 

and BIS–748P–B, (End-User Appendix). 

* * * 

* * * * * 

■ 44. Section 748.3 is amended by 

adding paragraph (e) to read as follows: 

§ 748.3 Classification requests, advisory 

opinions, and encryption registrations. 

* * * * * 

(e) Classification requests to confirm 

that a ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ is not ‘‘specially designed.’’ 

(1) Scope. If you have a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ that is 

‘‘specially designed’’ on the basis of 

paragraph (a)(1) or (2) of the ‘‘specially 

designed’’ definition in § 772.1 of the 

EAR, you may submit a request in 

accordance with the procedures in 

§ 748.1 to confirm that the item is not 

‘‘specially designed’’ provided you meet 

the following criteria: 

(i) The ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ does not meet the criteria of 

exclusion paragraph (b)(3) of the 

‘‘specially designed’’ definition, but 

would meet the criteria if the minor 

changes in form or fit were determined 

to be insignificant by the U.S. 

Government. 

(ii) The performance capabilities of 

the ‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ are the 

same as those of a ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ that would meet the criteria 

of exclusion paragraph (b)(3) of the 

definition of ‘‘specially designed’’ in 

§ 772.1 of the EAR. 

(2) Information to be provided. 

Applicants wishing to submit a CCATS 

requesting confirmation that a ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is not 

‘‘specially designed’’ must submit 

classification requests in accordance 

with the procedures in § 748.1 and 

general provisions regarding submitting 

classification requests in § 748.3(b). In 

addition, applicants must submit 

additional information identified in this 

paragraph (e)(2). 

(i) The classification request must 

indicate in Block 24 or in a separate 

PDF attachment included with the 

CCATS submission that the ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment’’ or ‘‘software’’ would meet 

the criteria in paragraph (e)(1)(i) and (ii) 

of this section; 

(ii) A detailed explanation must be 

provided regarding all changes in form 

and fit; and 

(iii) A rationale must be provided that 

explains why such changes in form and 

fit should be treated as minor or 

insignificant in terms of their role in the 

performance capabilities of the 

enumerated item. 

(3) U.S. Government Review. 

Commodity classification requests 

submitted pursuant to § 748.3(e) are 

reviewed by the Departments of 

Commerce, State and Defense. A 

consensus determination is required to 

confirm that a ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ is not ‘‘specially designed’’ 

on the basis of this paragraph. The 

interagency review process will ensure 

U.S. national security and foreign policy 

interests are evaluated prior to any 

confirmation pursuant to § 748.3(e). The 

interagency review will consider on a 

case-by-case basis whether a particular 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is 

‘‘specially designed’’ taking into 

account all the following: 

(i) The insignificance of the changes 

in form and fit; 

(ii) The overall role of the ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ in the 

performance capabilities of the 

enumerated item that it is used in or 

with; 

(iii) How substantively common it is 

to the other ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ that would meet the 

paragraph (b)(3) criteria; 

(iv) Whether such a confirmation 

would be consistent with U.S. 

Government multilateral export control 

regime commitments; and 

(v) Any other criteria that may be 

relevant in determining whether the 

‘‘part,’’ ‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is 

‘‘specially designed,’’ including an 

evaluation of how such a confirmation 

may affect U.S. national security and 

foreign policy interests. 

(4) CCATS response. The BIS 

response to the CCATS request will 

reflect the interagency consensus 

determination and the response will be 

made in accordance with the procedures 

in §§ 748.1 and 748.3(b). In addition, the 

BIS response will indicate one of the 

following: 

(i) The ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ is not ‘‘specially designed’’ 

on the basis of being within the scope 

of paragraph (b)(3) because the changes 

in form and fit have been determined by 

the U.S. Government to be minor or 

insignificant. In such cases, the new 

classification, which may be EAR99 or 

in another ECCN entry that does not use 

‘‘specially designed,’’ will be provided 

as part of the BIS response;’’ 

(ii) The request under § 748.3(e) has 

been denied and the ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ continues 

to be classified under a ‘‘specially 

designed’’ ‘catch-all’ (see the definition 

of ‘‘specially designed’’ in § 772.1 of the 

EAR). The response will also include a 

determination regarding where the 

‘‘specially designed’’ ‘‘part,’’ 

‘‘component,’’ ‘‘accessory,’’ 

‘‘attachment,’’ or ‘‘software’’ is classified 

on the CCL; or 

(iii) Returned without action (RWA) 

because insufficient information was 

provided or information was not 

provided in a timely fashion. These 

requests will be reviewed closely, and 

they will likely require additional 

follow up questions of applicants, so 

responding to such requests in a timely 

fashion will be an important part of the 

process to ensure such requests are 

considered by the U.S. Government. 

Note to paragraph (e): Although these 

requests for confirmation that an item is not 

‘‘specially designed’’ are also reviewed by the 

Departments of State and Defense, similar to 

§ 748.3(b)(3), the public is reminded that 

neither the BIS classification nor the CCATS 

number may be relied upon or cited as 

evidence that the U.S. Government has 

determined that the ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ ‘‘attachments’’ and ‘‘software’’ 

described in the commodity classification 

determination or a release made from 

‘‘specially designed’’ pursuant to § 748.3(e) 

are subject to the EAR (see § 734.3 of the 

EAR). 

■ 45. Section 748.8 is amended by 

adding paragraphs (w) and (x) to read as 

follows: 

§ 748.8 Unique application and 

submission requirements. 

* * * * * 

(w) License Exception STA eligibility 

requests for ‘‘600 series’’ end items. 

(x) License application for ‘‘600 

series’’ item that is equivalent to a 

transaction previously approved under 

an ITAR license or other approval. 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22725 

■ 46. Supplement No. 1 to part 748 

(BIS–748P, BIS–748P–A: Item 

Appendix, and BIS–748P–B: End-User 

Appendix; Multipurpose Application 

Instructions) is amended by: 

■ a. Adding a sentence to the end of 

Block 5; 

■ b. Adding a sentence to the end of 

Block 6; and 

■ c. Adding five sentences to the end of 

Block 24, to read as follows: 

Supplement No. 1 to Part 748—Item 

Appendix, and BIS–748P–B: End-User 

Appendix; Multipurpose Application 

Instructions 

* * * * * 

Block 5: * * * 

If you are submitting a License Exception 

STA eligibility request pursuant to 

§ 740.20(g), mark the box labeled ‘‘Export’’ 

with an +X) and then proceed to Block 6 of 

this supplement for instructions specific to 

such requests. 

Block 6: * * * 

Mark the ‘‘Other’’ box with an (X) and 

insert the phrase ‘‘STA request’’ for the 

description of the support document to 

submit a request for License Exception STA 

eligibility pursuant to § 740.20(g). (See 

Supplement No. 2 to part 748 under 

paragraph (w) for unique application and 

submission requirements for License 

Exception STA eligibility requests described 

under this Block 6.) 

* * * * * 

Block 24: Additional Information 

This Block should be completed if your 

application includes a ‘‘600 series’’ item that 

is equivalent to a transaction previously 

approved under an ITAR license or other 

approval. Enter the previous State license 

number or other approval identifier in Block 

24 of the BIS license application. If more 

than one previous State license number or 

other approval identifier is applicable, then 

enter the most recent one. Only those license 

applications where the particulars of the EAR 

license application are equivalent as 

previously authorized under the ITAR 

license or other approval in regard to the 

description of the item (including the item’s 

function, performance capabilities, form and 

fit), purchaser, ultimate consignee and end 

users on the license will receive full 

consideration under this paragraph, which 

may result in a quicker processing time. The 

classification of the ‘‘600 series’’ item in 

question will no longer be the same because 

the item would no longer be ‘‘subject to the 

ITAR,’’ but all other aspects of the 

description of the item must be the same in 

order to be reviewed under this expedited 

process under paragraph (x)of Supplement 

No. 2 to part 748 of the EAR.4.) 

* * * * * 

■ 47. Supplement No. 2 to part 748 

(Unique Application and Submission 

Requirements) is amended by adding 

paragraphs (w) and (x) to read as 

follows: 

Supplement No. 2 to Part 748—Unique 

Application and Submission 

Requirements 

* * * * * 

(w) License Exception STA eligibility 

requests for ‘‘600 series’’ end items. To 

request a License Exception STA eligibility 

requests for ‘‘600 series’’ end items pursuant 

to § 740.20(g), you must mark an (X) in the 

‘‘Export’’ box in Block 5 (Type of 

Application) block. You must mark an (X) in 

the ‘‘Other’’ box and insert the phrase ‘‘STA 

request’’ ’’ in Block 6 (Documents submitted 

with application) block. You must include 

the specific ‘‘600 Series’’ ECCN in Block 22. 

In addition to the ECCN, you will need to 

provide sufficient information for the U.S. 

Government to make a determination as to 

STA eligibility. This will require you to 

submit more than merely a description of the 

end item. In particular, you will need to 

provide supporting information for why you 

believe that the end item does not, for 

example, provide a critical military or 

intelligence advantage to the United States or 

is available in countries that are not regime 

partners or close allies. You will also need 

to provide information regarding whether 

and, if so, how the end item is controlled by 

the export control laws and regulations of 

close allies and regime partners, if known. If 

you are not able to provide some of the 

information described above, the U.S. 

Government will still evaluate the request, 

including using resources and information 

that may only be available to the U.S. 

Government. However, when submitting 

such requests you are encouraged to provide 

as much information as you can based on the 

criteria noted above to assist the U.S. 

Government in evaluating these License 

Exception STA eligibility requests. In 

addition, you should provide BIS with the 

text you would propose BIS use in describing 

the end item in the appropriate ‘‘600 series’’ 

ECCN and the online table referenced in 

§ 740.20(g)(5)(i) in anticipation that the 

request may be approved pursuant to 

§ 740.20(g). You may submit additional 

information that you believe is relevant to the 

U.S. Government in reviewing the License 

Exception STA eligibility request as part of 

that support document or as an additional 

separate support document attachment to the 

license application. 

(x) License application for a ‘‘600 series’’ 

item that is equivalent to a transaction 

previously approved under an ITAR license 

or other license authority. To request that the 

U.S. Government review of a license 

application for a ‘‘600 series’’ item also take 

into consideration a previously approved 

ITAR license or other approval, applicants 

must also include the State license number 

or other approval identifier in Block 24 of the 

BIS license application (See the instructions 

in Supplement No. 1 to part 748 under Block 

24). 

Note to paragraph (x): License applications 

submitted under paragraph (x) will still be 

reviewed in accordance with license review 

procedures and timelines identified in part 

750, including §§ 750.3 and 750.4. 

Applicants are advised that including a 

previously approved State license or other 

approval may have no effect on the license 

review process since each application is 

reviewed on its own merits at the time of 

submission. However, in some cases, 

previous licensing history may result in 

license applications being reviewed more 

quickly. 

PART 750—[AMENDED] 

■ 48. The authority citation for part 750 

is revised to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; Sec 1503, Pub. L. 108– 

11, 117 Stat. 559; E.O. 13026, 61 FR 58767, 

3 CFR, 1996 Comp., p. 228; E.O. 13222, 66 

FR 44025, 3 CFR, 2001 Comp., p. 783; E.O. 

13637 of March 8, 2013, 78 FR 16129 (March 

13, 2013); Presidential Determination 2003– 

23 of May 7, 2003, 68 FR 26459, May 16, 

2003; Notice of August 15, 2012, 77 FR 49699 

(August 16, 2012). 

■ 49. Section 750.4 is amended by 

adding paragraph (b)(7) to read as 

follows: 

§ 750.4 Procedures for processing license 

applications. 

* * * * * 

(b) * * * 

(7) Congressional Notification. 

Congressional notification, including 

any consultations prior to notification, 

prior to the issuance of an authorization 

to export when notification is required 

by § 743.5 of the EAR. 

■ 50. Section 750.7 is amended by 

adding paragraph (c)(1)(ix) and revising 

paragraphs (g) introductory text and 

(g)(1) introductory text to read as 

follows: 

§ 750.7 Issuance of licenses. 

(c) * * * 

(1) * * * 

(ix) Direct exports, reexports, or 

transfers (in-country) to and among 

approved end users on a license, 

provided those end users are listed by 

name and location on such license and 

the license does not contain any 

conditions specific to the ultimate 

consignee that cannot be complied with 

by the end user, such as a reporting 

requirement that must be made by the 

ultimate consignee. Reexports and 

transfers (in-country) among approved 

end users may be further limited by 

license conditions. 

* * * * * 

(g) License validity period. Licenses 

involving the export or reexport of items 

will generally have a four-year validity 

period, unless a different validity period 

has been requested and specifically 

approved by BIS or is otherwise 

specified on the license at the time that 

it is issued. Exceptions from the fouryear validity period include license 

applications for items controlled for 

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22726 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

short supply reasons, which will be 

limited to a 12-month validity period 

and license applications reviewed and 

approved as an ‘‘emergency’’ (see 

§ 748.4(h) of the EAR). Emergency 

licenses will expire no later than the last 

day of the calendar month following the 

month in which the emergency license 

is issued. The expiration date will be 

clearly stated on the face of the license. 

If the expiration date falls on a legal 

holiday (Federal or State), the validity 

period is automatically extended to 

midnight of the first business day 

following the expiration date. 

(1) Extended validity period. BIS will 

consider granting a validity period 

exceeding 4 years on a case-by-case 

basis when extenuating circumstances 

warrant such an extension. Requests for 

such extensions may be made at the 

time of application or after the license 

has been issued and it is still valid. BIS 

will not approve changes regarding 

other aspects of the license, such as the 

parties to the transaction and the 

countries of ultimate destination. An 

extended validity period will generally 

be granted where, for example, the 

transaction is related to a multi-year 

project; when the period corresponds to 

the duration of a manufacturing license 

agreement, technical assistance 

agreement, warehouse and distribution 

agreement, or license issued under the 

International Traffic in Arms 

Regulations; when production lead time 

will not permit an export or reexport 

during the original validity period of the 

license; when an unforeseen emergency 

prevents shipment within the 4-year 

validity of the license; or for other 

similar circumstances. 

* * * * * 

PART 756—[AMENDED] 

■ 51. The authority citation for part 756 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

■ 52. Section 756.1 is amended by 

adding paragraph (a)(4) to read as 

follows: 

§ 756.1 Introduction. 

(a) * * * 

(4) A decision on whether License 

Exception STA is available for ‘‘600 

series’’ ‘‘end items’’ pursuant to 

§ 740.20(g). 

* * * * * 

PART 758—[AMENDED] 

■ 53. The authority citation for part 758 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

■ 54. Section 758.1 is amended by 

revising the section heading, 

redesignating paragraphs (b)(3) through 

(5) as paragraphs (b)(5) through (7), and 

by adding new paragraphs (b)(3) and (4) 

to read as follows: 

§ 758.1 The Automated Export System 

(AES) record. 

* * * * * 

(b) * * * 

(3) For all exports of ‘‘600 series’’ 

items enumerated in paragraphs .a 

through .x of a ‘‘600 series’’ ECCN 

regardless of value or destination, 

including exports to Canada; 

(4) For all exports under License 

Exception Strategic Trade Authorization 

(STA); 

* * * * * 

■ 55. Section 758.2 is amended by 

adding paragraph (c)(4) to read as 

follows: 

§ 758.2 Automated Export System (AES). 

* * * * * 

(c) * * * 

(4) Exports are made under License 

Exception Strategic Trade Authorization 

(STA); are made under Authorization 

Validated End User (VEU); or are of 

‘‘600 series’’ items. 

■ 56. Section 758.5 is amended by 

revising paragraphs (a), (b), (c), and (d) 

to read as follows: 

§ 758.5 Conformity of documents and 

unloading of items. 

(a) Purpose. The purpose of this 

section is to prevent items licensed for 

export from being diverted while in 

transit or thereafter. It also sets forth the 

duties of the parties when the items are 

unloaded in a country other than that of 

the ultimate consignee or end user as 

stated on the export license. 

(b) Conformity of documents. When a 

license is issued by BIS, the information 

entered on related export control 

documents (e.g., the AES record, bill of 

lading or air waybill) must be consistent 

with the license. 

(c) Issuance of the bill of lading or air 

waybill. (1) Ports in the country of the 

ultimate consignee or end user. No 

person may issue a bill of lading or air 

waybill that provides for delivery of 

licensed items to any foreign port 

located outside the country of an 

intermediate consignee, ultimate 

consignee, or end user named on the 

BIS license and in the AES record. 

(2) Optional ports of unloading. (i) 

Licensed items. No person may issue a 

bill of lading or air waybill that provides 

for delivery of licensed items to optional 

ports of unloading unless all the 

optional ports are within the country of 

ultimate destination or are included on 

the BIS license and in the AES record. 

(ii) Unlicensed items. For shipments 

of items that do not require a license, 

the exporter may designate optional 

ports of unloading in AES record and on 

other export control documents, so long 

as the optional ports are in countries to 

which the items could also have been 

exported without a license. 

(d) Delivery of items. No person may 

deliver items to any country other than 

the country of an intermediate 

consignee, ultimate consignee, or end 

user named on the BIS license and AES 

record without prior written 

authorization from BIS, except for 

reasons beyond the control of the carrier 

(such as acts of God, perils of the sea, 

damage to the carrier, strikes, war, 

political disturbances or insurrection). 

* * * * * 

■ 57. Section 758.6 is revised to read as 

follows: 

§ 758.6 Destination control statement and 

other information furnished to consignees. 

(a) General requirement. The 

Destination Control Statement (DCS) 

must be entered on the invoice and on 

the bill of lading, air waybill, or other 

export control document that 

accompanies the shipment from its 

point of origin in the United States to 

the ultimate consignee or end-user 

abroad. The person responsible for 

preparation of those documents is 

responsible for entry of the DCS. The 

DCS is required for all exports from the 

United States of items on the Commerce 

Control List that are not classified as 

EAR99, unless the export may be made 

under License Exception BAG or GFT 

(see part 740 of the EAR). At a 

minimum, the DCS must state: ‘‘These 

commodities, technology, or software 

were exported from the United States in 

accordance with the Export 

Administration Regulations. Diversion 

contrary to U.S. law is prohibited.’’ 

(b) Additional requirement for ‘‘600 

series’’ items. In addition to the DCS as 

required in paragraph (a) of this section, 

the ECCN for each ‘‘600 Series’’ item 

being exported must be printed on the 

invoice and on the bill of lading, air 

waybill, or other export control 

document that accompanies the 

shipment from its point of origin in the 

United States to the ultimate consignee 

or end-user abroad. 

PART 762—[AMENDED] 

■ 58. The authority citation for part 762 

continues to read as follows: 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22727 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

■ 59. Section 762.2 is amended by: 

■ a. Revising paragraphs (b)(5), (7), (10), 

and (13); 

■ b. Removing the ‘‘and’’ at the end of 

the paragraph (b)(48); 

■ c. Removing the period at the end of 

paragraph (b)(49) and adding a semicolon in its place; and 

■ d. Adding paragraphs (b)(50) and (51). 

The revisions and additions read as 

follows: 

§ 762.2 Records to be retained. 

* * * * * 

(b) * * * 

(5) § 740.9(a)(3)(i)(B), Tools of trade: 

Temporary exports, reexports, and 

transfers (in country) of technology by 

U.S. persons (TMP); 

* * * * * 

(7) § 740.11(b)(2)(iii) and (iv), Exports, 

reexports and transfers (in-country) 

made for or on behalf of a department 

or agency of the U.S. Government and 

Items exported at the direction of the 

U.S. Department of Defense (GOV); 

* * * * * 

(10) § 740.20(g), Responses to License 

Exception STA eligibility requests for 

‘‘600 series’’ end items (STA); 

* * * * * 

(13) § 743.4(c)(1) and (c)(2), 

Conventional arms reporting; 

* * * * * 

(50) § 772.2, ‘‘Specially designed’’ 

definition, note to paragraphs (b)(4), 

(b)(5), and (b)(6); and 

(51) § 740.20, note to paragraph (c)(1), 

License Exception STA prior approval 

on a BIS or DDTC license (STA). 

PART 764—[AMENDED] 

■ 60. The authority citation for part 764 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

Supplement No. 1 to Part 764 

[Amended] 

■ 61. Supplement No. 1 to part 764 is 

amended by removing the penultimate 

paragraph. 

PART 770—[AMENDED] 

■ 62. The authority citation for part 770 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

§ 770.2 [Amended] 

■ 63. Section 770.2 is amended by 

removing and reserving paragraphs (i) 

and (j). 

PART 772—[AMENDED] 

■ 64. The authority citation for part 772 

continues to read as follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; E.O. 13222, 66 FR 44025, 

3 CFR, 2001 Comp., p. 783; Notice of August 

15, 2012, 77 FR 49699 (August 16, 2012). 

■ 65. Section 772.1 is amended by: 

■ a. Revising the definitions of ‘‘dual 

use,’’ ‘‘military commodity,’’ and 

‘‘specially designed;’’ and 

■ b. Adding, in alphabetical order, the 

following twelve definitions for the 

terms ‘‘600 series,’’ ‘‘600 Series Major 

Defense Equipment’’ or ‘‘MDE,’’ 

‘‘accessories,’’ ‘‘attachments,’’ ‘‘build-toprint technology,’’ ‘‘component,’’ ‘‘end 

item,’’ ‘‘equipment,’’ ‘‘facilities,’’ 

‘‘material,’’ ‘‘part,’’ and ‘‘system’’. 

The revisions and additions read as 

follows: 

§ 772.1 Definitions of terms as used in the 

Export Administration Regulations (EAR). 

* * * * * 

600 series. ECCNs in the ‘‘xY6zz’’ 

format on the Commerce Control List 

(CCL) that control items on the CCL that 

were previously controlled on the U.S. 

Munitions List or that are covered by 

the Wassenaar Arrangement Munitions 

List (WAML). The ‘‘6’’ indicates the 

entry is a munitions entry on the CCL. 

The ‘‘x’’ represents the CCL category 

and ‘‘Y’’ the CCL product group. The 

‘‘600 series’’ constitutes the munitions 

ECCNs within the larger CCL. 600 Series 

Major Defense Equipment or MDE. Any 

item listed in ECCN 9A610.a, 9A619.a, 

9A619.b or 9A619.c, having a 

nonrecurring research and development 

cost of more than $50,000,000 or a total 

production cost of more than 

$200,000,000. 

Note to ‘‘600 Series Major Defense 

Equipment’’: For the most current list of 

MDE, see Appendix 1, (Nonrecurring Cost 

Recoupment Charges for Major Defense 

Equipment) to DoD 5105.38–M, ‘‘Security 

Assistance Management Manual (SAMM),’’ 

dated 04/30/2012, available online at http:// 

www.dsca.osd.mil/samm/ESAMM/ 

Appendix01.htm. Accessories. These are 

associated items for any ‘‘component,’’ ‘‘end 

item,’’ or ‘‘system,’’ and which are not 

necessary for their operation, but which 

enhance their usefulness or effectiveness. For 

example, for a riding lawnmower, 

‘‘accessories’’ and ‘‘attachments’’ will 

include the bag to capture the cut grass, and 

a canopy to protect the operator from the sun 

and rain. For purposes of this definition, 

‘‘accessories’’ and ‘‘attachments’’ are the 

same. 

* * * * * 

Attachments. These are associated 

items for any ‘‘component,’’ ‘‘end item,’’ 

or ‘‘system,’’ and which are not 

necessary for their operation, but which 

enhance their usefulness or 

effectiveness. For example, for a riding 

lawnmower, ‘‘accessories’’ and 

‘‘attachments’’ will include the bag to 

capture the cut grass, and a canopy to 

protect the operator from the sun and 

rain. For purposes of this definition, 

‘‘attachments’’ and ‘‘accessories’’ are the 

same. 

* * * * * 

Build-to-Print technology. (1) This is 

‘‘production’’ ‘‘technology’’ that is 

sufficient for an inherently capable end 

user to produce or repair a commodity 

from engineering drawings without: 

(i) Revealing ‘‘development’’ 

‘‘technology,’’ such as design 

methodology, engineering analysis, 

detailed process or manufacturing 

know-how; 

(ii) Revealing the production 

engineering or process improvement 

aspect of the ‘‘technology;’’ or 

(iii) Requiring assistance from the 

provider of the technology to produce or 

repair the commodity. 

(2) Acceptance, test, or inspection 

criteria pertaining to the commodity at 

issue is included within the scope of 

‘‘build-to-print technology’’ only if it is 

the minimum necessary to verify that 

the commodity is acceptable. 

* * * * * 

Component. This is an item that is 

useful only when used in conjunction 

with an ‘‘end item.’’ ‘‘Components’’ are 

also commonly referred to as 

assemblies. For purposes of this 

definition an assembly and a 

‘‘component’’ are the same. There are 

two types of ‘‘components’’: ‘‘Major 

components’’ and ‘‘minor components.’’ 

A ‘‘major component’’ includes any 

assembled element which forms a 

portion of an ‘‘end item’’ without which 

the ‘‘end item’’ is inoperable. For 

example, for an automobile, 

‘‘components’’ will include the engine, 

transmission, and battery. If you do not 

have all those items, the automobile will 

not function, or function as effectively. 

A ‘‘minor component’’ includes any 

assembled element of a ‘‘major 

component.’’ ‘‘Components’’ consist of 

‘‘parts.’’ References in the CCL to 

‘‘components’’ include both ‘‘major 

components’’ and ‘‘minor components.’’ 

* * * * * 

Dual use. Items that have both 

commercial and military or proliferation 

applications. While this term is used 

informally to describe items that are 

subject to the EAR, purely commercial 

items and certain munitions items listed 

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22728 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

on the Wassenaar Arrangement 

Munitions List (WAML) or the Missile 

Technology Control Regime Annex are 

also subject to the EAR (see § 734.2(a) of 

the EAR). 

* * * * * 

End item. This is an assembled 

commodity ready for its intended use. 

Only ammunition, fuel or other energy 

source is required to place it in an 

operating state. Examples of end items 

include ships, aircraft, computers, 

firearms, and milling machines. 

* * * * * 

Equipment. This is a combination of 

parts, components, accessories, 

attachments, firmware, or software that 

operate together to perform a 

specialized function of an end item or 

system. 

* * * * * 

Facilities. This means a building or 

outdoor area in which people use an 

item that is built, installed, produced, or 

developed for a particular purpose. 

* * * * * 

Material. This is any list-specified 

crude or processed matter that is not 

clearly identifiable as any of the types 

of items defined in § 772.1 under the 

defined terms, ‘‘end item,’’ 

‘‘component,’’ ‘‘accessories,’’ 

‘‘attachments,’’ ‘‘part,’’ ‘‘software,’’ 

‘‘system, ‘‘equipment,’’ or ‘‘facilities.’’ 

The exclusion from the definition of 

material for clearly identifiable items 

defined in § 772.1, such as for ‘‘parts’’ 

and ‘‘components,’’ does not apply to 

the following ECCNs: 1C233, 1C234, 

1C235, 1C236, 1C237, 1C239, 1C350, 

1C395, 1C991, 1C992, and 1C995. 

* * * * * 

Military commodity. As used in 

§ 734.4(a)(5), Supplement No. 1 to part 

738 (footnote No. 3), §§ 740.2(a)(11), 

740.16(a)(2), 740.16(b)(2), 742.6(a)(3), 

744.9(a)(2), 744.9(b), ECCN 0A919 and 

(Related Controls) in ‘‘600 series’’ 

ECCNs, ‘‘military commodity’’ or 

‘‘military commodities’’ means an 

article, material, or supply that is 

described on the U.S. Munitions List (22 

CFR Part 121) or on the Munitions List 

that is published by the Wassenaar 

Arrangement on Export Controls for 

Conventional Arms and Dual-Use Goods 

and Technologies, but does not include 

software, technology and any item listed 

in any ECCN for which the last three 

numerals are 018 or any item in the 

‘‘600 series.’’ 

* * * * * 

Part. This is any single unassembled 

element of a ‘‘component,’’ ‘‘accessory,’’ 

or ‘‘attachment’’ which is not normally 

subject to disassembly without the 

destruction or the impairment of design 

use. Examples include threaded 

fasteners (e.g., screws, bolts, nuts, nut 

plates, studs, inserts), other fasteners 

(e.g., clips, rivets, pins), common 

hardware (e.g., washers, spacers, 

insulators, grommets, bushings), springs 

and wire. 

* * * * * 

Specially designed. When applying 

this definition, follow this sequential 

analysis set forth below. (For additional 

guidance on the order of review of 

‘‘specially designed,’’ including how the 

review of the term relates to the larger 

CCL, see Supplement No. 4 to Part 774 

of the EAR—Commerce Control List 

Order of Review.) 

(a) Except for items described in (b), 

an ‘‘item’’ is ‘‘specially designed’’ if it: 

(1) As a result of ‘‘development’’ has 

properties peculiarly responsible for 

achieving or exceeding the performance 

levels, characteristics, or functions in 

the relevant ECCN or U.S. Munitions 

List (USML) paragraph; or 

(2) Is a ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ for use in or with a 

commodity or defense article 

‘enumerated’ or otherwise described on 

the CCL or the USML. 

(b) A ‘‘part,’’ ‘‘component,’’ 

‘‘accessory,’’ ‘‘attachment,’’ or 

‘‘software’’ that would be controlled by 

paragraph (a) is not ‘‘specially 

designed’’ if it: 

(1) Has been identified to be in an 

ECCN paragraph that does not contain 

‘‘specially designed’’ as a control 

parameter or as an EAR99 item in a 

commodity jurisdiction (CJ) 

determination or interagency-cleared 

commodity classification (CCATS) 

pursuant to § 748.3(e); 

(2) Is, regardless of ‘form’ or ‘fit,’ a 

fastener (e.g., screw, bolt, nut, nut plate, 

stud, insert, clip, rivet, pin), washer, 

spacer, insulator, grommet, bushing, 

spring, wire, solder; 

(3) Has the same function, 

performance capabilities, and the same 

or ‘equivalent’ form and fit, as a 

commodity or software used in or with 

an item that: 

(i) Is or was in ‘‘production’’ (i.e., not 

in ‘‘development’’); and 

(ii) Is either not ‘enumerated’ on the 

CCL or USML, or is described in an 

ECCN controlled only for AntiTerrorism (AT) reasons; 

(4) Was or is being developed with 

‘‘knowledge’’ that it would be for use in 

or with commodities or software (i) 

described in an ECCN and (ii) also 

commodities or software either not 

‘enumerated’ on the CCL or the USML 

(e.g., EAR99 commodities or software) 

or commodities or software described in 

an ECCN controlled only for AntiTerrorism (AT) reasons; 

(5) Was or is being developed as a 

general purpose commodity or software, 

i.e., with no ‘‘knowledge’’ for use in or 

with a particular commodity (e.g., an F/ 

A–18 or HMMWV) or type of 

commodity (e.g., an aircraft or machine 

tool); or 

(6) Was or is being developed with 

‘‘knowledge’’ that it would be for use in 

or with commodities or software 

described (i) in an ECCN controlled for 

AT-only reasons and also EAR99 

commodities or software; or (ii) 

exclusively for use in or with EAR99 

commodities or software. 

Note 1: ‘Enumerated’ refers to any item (i) 

on either the USML or CCL not controlled in 

a ‘catch-all’ paragraph and (ii) when on the 

CCL, controlled by an ECCN for more than 

Anti-Terrorism (AT) reasons only. An 

example of an ‘enumerated’ ECCN is 2A226, 

which controls valves with the following 

three characteristics: a ‘‘nominal size’’ of 5 

mm or greater; having a bellows seal; and 

wholly made of or lined with aluminum, 

aluminum alloy, nickel, or nickel alloy 

containing more than 60% nickel by weight. 

The CCL also contains notes excluding from 

control ‘‘parts’’ and ‘‘components’’ ‘‘specially 

designed’’ for uncontrolled items. Such 

uncontrolled items are merely ‘described’ 

and are not ‘enumerated.’ Note 2 to ECCN 

1A002 is an example of items excluded from 

control based on being ‘‘specially designed’’ 

for a ‘described’ item. Commodities or 

software in an ECCN controlled only for AT 

reasons are other examples of items 

‘described’ on the CCL. ECCN 2B996, which 

controls dimensional inspection or 

measuring systems or equipment not 

controlled by 2B006, is an example of a 

commodity ‘described’ in an ECCN 

controlled only for AT reasons. 

Note 2: A ‘catch-all’ paragraph is one that 

does not refer to specific types of ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ or 

‘‘attachments’’ but rather controls nonspecific ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ or ‘‘attachments’’ because they 

were ‘‘specially designed’’ for an enumerated 

item. For example, ECCN paragraph 9A610.x 

is a catch-all, because it controls ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ ‘‘specially designed’’ for 

military aircraft, but does not identify 

specific types of ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ or ‘‘attachments’’ within its 

control. Another example of a ‘catch-all’ is 

the heading of 7A102, which controls 

‘‘specially designed’’ components for the 

gyros enumerated in 7A102, but does not 

identify the specific types of ‘‘components’’ 

within its control. 

Note to paragraph (a)(1): Items that as a 

result of ‘‘development’’ have properties 

peculiarly responsible for achieving or 

exceeding the performance levels, ‘functions’ 

or characteristics in a relevant ECCN 

paragraph may have properties shared by 

different products. For example, ECCN 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22729 

1A007 controls equipment and devices, 

specially designed to initiate charges and 

devices containing energetic materials, by 

electrical means. An example of equipment 

not meeting the peculiarly responsible 

standard under paragraph (a)(1) is a garage 

door opener, that as a result of 

‘‘development’’ has properties that enable the 

garage door opener to send an encoded signal 

to another piece of equipment to perform an 

action (i.e., the opening of a garage door). The 

garage door opener is not ‘‘specially 

designed’’ for purposes of 1A007 because 

although the garage door opener could be 

used to send a signal by electrical means to 

charges or devices containing energetic 

materials, the garage door opener does not 

have properties peculiarly responsible for a 

achieving or exceeding the performance 

levels, ‘functions’ or characteristics in 1A007. 

For example, the garage door opener is 

designed to only perform at a limited range 

and the level of encoding is not as advanced 

as the encoding usually required in 

equipment and devices used to initiate 

charges and devices containing energetic 

materials, by electrical means. Conversely, 

another piece of equipment that, as a result 

of ‘‘development,’’ has the properties (e.g., 

sending a signal at a longer range, having 

signals with advanced encoding to prevent 

interference, and having signals that are 

specific to detonating blasting caps) needed 

for equipment used to initiate charges and 

devices containing energetic materials, 

would be peculiarly responsible because the 

equipment has a direct and proximate causal 

relationship that is central or special for 

achieving or exceeding the performance 

levels, ‘functions’ or characteristics identified 

in 1A007. 

Note 1 to paragraph (b)(3): Commodities in 

‘‘production’’ that are subsequently subject to 

‘‘development’’ activities, such as those that 

would result in enhancements or 

improvements only in the reliability or 

maintainability of the commodity (e.g., an 

increased mean time between failure 

(MTBF)), including those pertaining to 

quality improvements, cost reductions, or 

feature enhancements, remain in 

‘‘production.’’ However, any new models or 

versions of such commodities developed 

from such efforts that change the basic 

performance or capability of the commodity 

are in ‘‘development’’ until and unless they 

enter into ‘‘production.’’ 

Note 2 to paragraph (b)(3): With respect to 

a commodity, ‘equivalent’ means that its 

form has been modified solely for ‘fit’ 

purposes. 

Note 3 to paragraph (b)(3): The ‘form’ of 

a commodity is defined by its configuration 

(including the geometrically measured 

configuration), material, and material 

properties that uniquely characterize it. The 

‘‘fit’ of a commodity is defined by its ability 

to physically interface or interconnect with 

or become an integral part of another item. 

The ‘function’ of the item is the action or 

actions it is designed to perform. 

‘Performance capability’ is the measure of a 

commodity’s effectiveness to perform a 

designated function in a given environment 

(e.g., measured in terms of speed, durability, 

reliability, pressure, accuracy, efficiency). 

For software, ‘form’ means the design, logic 

flow, and algorithms. ‘Fit’ means the ability 

to interface or connect with an item subject 

to the EAR. The ‘function’ means the action 

or actions it performs directly to an item 

subject to the EAR or as a stand-alone 

application. ‘Performance capability’ means 

the measure of software’s effectiveness to 

perform a designated function. 

Note to paragraphs (b)(4), (b)(5) and (b)(6): 

For a commodity or software to be not 

‘‘specially designed’’ on the basis of 

paragraphs (b)(4), (b)(5) or (b)(6), documents 

contemporaneous with its ‘‘development,’’ in 

their totality, must establish the elements of 

paragraphs (b)(4), (b)(5) or (b)(6). Such 

documents may include concept design 

information, marketing plans, declarations in 

patent applications, or contracts. Absent such 

documents, the ‘‘commodity’’ may not be 

excluded from being ‘‘specially designed’’ by 

paragraphs (b)(4), (b)(5) or (b)(6). 

* * * * * 

System. This is a combination of ‘‘end 

items,’’ ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ ‘‘attachments,’’ firmware, 

or ‘‘software’’ that are designed, 

modified or adapted to operate together 

to perform a specialized ‘function.’ 

* * * * * 

PART 774—[AMENDED] 

■ 66. The authority citation paragraph 

for part 774 continues to read as 

follows: 

Authority: 50 U.S.C. app. 2401 et seq.; 50 

U.S.C. 1701 et seq.; 10 U.S.C. 7420; 10 U.S.C. 

7430(e); 22 U.S.C. 287c, 22 U.S.C. 3201 et 

seq.; 22 U.S.C. 6004; 30 U.S.C. 185(s), 185(u); 

42 U.S.C. 2139a; 42 U.S.C. 6212; 43 U.S.C. 

1354; 15 U.S.C. 1824a; 50 U.S.C. app. 5; 22 

U.S.C. 7201 et seq.; 22 U.S.C. 7210; E.O. 

13026, 61 FR 58767, 3 CFR, 1996 Comp., p. 

228; E.O. 13222, 66 FR 44025, 3 CFR, 2001 

Comp., p. 783; Notice of August 15, 2012, 77 

FR 49699 (August 16, 2012). 

■ 67. In Supplement No. 1 to part 774 

(the Commerce Control List) is amended 

by: 

■ a. Removing the Product Group A 

heading, in all 10 categories of the CCL, 

‘‘SYSTEMS, EQUIPMENT AND 

COMPONENTS’’ and adding in its place 

the Product Group A heading ‘‘END 

ITEMS,’’ ‘‘EQUIPMENT,’’ 

‘‘ACCESSORIES,’’ ‘‘ATTACHMENTS,’’ 

‘‘PARTS,’’ ‘‘COMPONENTS,’’ AND 

‘‘SYSTEMS’’; 

■ b. Adding quotes around the term 

‘‘PRODUCTION EQUIPMENT’’ in the 

heading of Product Group B in all 10 

categories of the CCL; and 

■ c. Adding quotes around the Product 

Group C heading ‘‘MATERIALS’’ in all 

10 categories of the CCL; 

■ d. Adding quotes around the Product 

Group D heading ‘‘SOFTWARE’’ in all 

10 categories of the CCL; and 

■ e. Adding quotes around the Product 

Group E heading ‘‘TECHNOLOGY’’ in 

all 10 categories of the CCL. 

■ 68. Supplement No. 1 to part 774 is 

amended by removing the phrase ‘‘eight 

destinations listed in § 740.20(c)(2) of 

the EAR’’ wherever it is found and 

adding in its place ‘‘destinations listed 

in Country Group A:6 (See Supplement 

No.1 to part 740 of the EAR’’). 

■ 69. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 

0–, ECCN 0A919 is amended by revising 

the heading and the ‘‘Related Controls,’’ 

‘‘Related Definitions,’’ and ‘‘Items’’ 

paragraphs to read as follows: 

0A919 ‘‘Military Commodities’’ Located 

and Produced Outside the United States 

as Follows (see list of items controlled). 

* * * * * 

List of Items Controlled 

Unit: * * * 

Related Controls: (1) ‘‘Military 

commodities’’ are subject to the export 

licensing jurisdiction of the Department of 

State if they incorporate items that are 

subject to the International Traffic in Arms 

Regulations (ITAR) (22 CFR Parts 120–130). 

(2) ‘‘Military commodities’’ described in this 

paragraph are subject to the export licensing 

jurisdiction of the Department of State if such 

commodities are described on the U.S. 

Munitions List (22 CFR Part 121) and are in 

the United States. (3) The furnishing of 

assistance (including training) to foreign 

persons, whether in the United States or 

abroad, in the design, development, 

engineering, manufacture, production, 

assembly, testing, repair, maintenance, 

modification, operation, demilitarization, 

destruction, processing, or use of defense 

articles that are subject to the ITAR; or the 

furnishing to foreign persons of any technical 

data controlled under 22 CFR 121.1 whether 

in the United States or abroad are under the 

licensing jurisdiction of the Department of 

State. (4) Brokering activities (as defined in 

22 CFR 129) of ‘‘military commodities’’ that 

are subject to the ITAR are under the 

licensing jurisdiction of the Department of 

State. 

Related Definitions: ‘‘Military commodity’’ or 

‘‘military commodities’’ means an article, 

material or supply that is described on the 

U.S. Munitions List (22 CFR Part 121) or 

on the Munitions List that is published by 

the Wassenaar Arrangement on Export 

Controls for Conventional Arms and DualUse Goods and Technologies (i.e., the 

Wassenaar Arrangement Munitions List 

(WAML)), but does not include software, 

technology, any item listed in any ECCN 

for which the last three numerals are 018, 

or any item in the ‘‘600 series.’’ 

Items: 

a. ‘‘Military commodities’’ produced and 

located outside the United States having all 

of the following characteristics: 

a.1. Not subject to the International Traffic 

in Arms Regulations (22 CFR Parts 120–130); 

and 

a.2. Having one or more of the following 

characteristics: 

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22730 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

a.2.a. Incorporate one or more cameras 

controlled under ECCN 6A003.b.3, .b.4.b, or 

.b.4.c. 

a.2.b. Incorporate more than a de minimis 

amount of U.S.-origin ‘‘600 series’’ controlled 

content (see § 734.4 of the EAR); or 

a.2.c. Are direct products of U.S.-origin 

‘‘600 series’’ technology (see § 736.2(b)(3) of 

the EAR). 

b. [RESERVED] 

■ 70. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 9, 

ECCN 9A018 is amended by: 

■ a. Removing the phrase ‘‘9A018.a and 

b’’ and adding in its place ‘‘9A018.b’’ in 

the RS paragraph of the License 

Requirements section; 

■ b. Revising the ‘‘Related Controls’’ 

and ‘‘Related Definitions’’ paragraph in 

the List of Items Controlled section, as 

set forth below; and 

■ c. Revising the ‘‘Items’’ paragraph in 

the List of Items Controlled section by 

removing and reserving paragraph .a, 

and by removing paragraphs .c through 

.f. 

9A018 Equipment on the Wassenaar 

Arrangement Munitions List. 

* * * * * 

List of Items Controlled 

Unit: * * * 

Related Controls: (1) The Department of 

State, Directorate of Defense Trade 

Controls has export licensing jurisdiction 

for: (a) all military ground vehicles and 

‘‘components’’ therefor as described in 22 

CFR 121, Category VII; and (b) vehicles that 

have been armed or armored with articles 

described in 22 CFR 121 or that have been 

manufactured or fitted with special 

reinforcements for mounting arms or other 

specialized military equipment described 

in 22 CFR 121, Category VII, see § 770.2(h) 

Interpretation 8: ‘‘Ground vehicles’’. (2) 

See ECCN 9A610 for the aircraft, refuelers, 

ground equipment, parachutes, harnesses, 

and instrument flight trainers, as well as 

‘‘parts,’’ ‘‘accessories,’’ and ‘‘attachments’’ 

for the forgoing that, immediately prior to 

October 15, 2013, were classified under 

9A018.a.1, .a.3, .c, .d, .e, or .f. (3) See ECCN 

9A619 for military trainer aircraft turbo 

prop engines and ‘‘parts’’ and 

‘‘components’’ therefor that, immediately 

prior to October 15, 2013, were classified 

under ECCN 9A018.a.2 or .a.3. 

Related Definitions: N/A 

Items: a. [Reserved] 

b. * * * 

■ 71. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 

9— Aerospace and Propulsion, ECCN 

9D018 is amended by: 

■ a. Removing the phrase ‘‘9A018.a and 

.b’’ and adding in its place ‘‘9A018.b’’ 

in the RS paragraph of the ‘‘License 

Requirements’’ section; and 

■ b. Revising the ‘‘Related Controls’’ 

paragraph in the ‘‘List of Items 

Controlled’’ section, to read as follows: 

9D018 ‘‘Software’’ for the ‘‘use’’ of 

equipment controlled by 9A018. 

* * * * * 

List of Items Controlled 

Unit: * * * 

Related Controls: (1) See ECCN 9D610 for 

‘‘software’’ related to aircraft, refuelers, 

ground equipment, parachutes, harnesses, 

instrument flight trainers and ‘‘parts,’’ 

‘‘accessories,’’ and ‘‘attachments’’ for the 

forgoing that, immediately prior to October 

15, 2013, were classified under 9A018.a.1, 

.a.3, .c, .d, .e, or .f. (2) See ECCN 9D619 for 

‘‘software’’ related to military trainer 

aircraft turbo prop engines and ‘‘parts’’ and 

‘‘components’’ therefor that, immediately 

prior to October 15, 2013, were classified 

under ECCN 9A018.a.2 or .a.3. 

Related Definitions: * * * 

Items: * * * 

■ 72. In Supplement No. 1 to part 774 

(the Commerce Control List), Category 9, 

ECCN 9E018 is amended by: 

■ a. Removing the phrase ‘‘9A018.a and 

.b’’ and adding in its place ‘‘9A018.b’’ 

in the RS paragraph of the License 

Requirements section; and 

■ b. Revising the ‘‘Related Controls’’ 

paragraph, to read as follows: 

9E018 ‘‘Technology’’ for the 

‘‘development,’’ ‘‘production,’’ or ‘‘use’’ 

of equipment controlled by 9A018. 

* * * * * 

List of Items Controlled 

Unit: * * * 

Related Controls: (1) See ECCN 9E610 for 

‘‘technology’’ related to aircraft, refuelers, 

ground equipment, parachutes, harnesses, 

instrument flight trainers and ‘‘parts,’’ 

‘‘accessories,’’ and ‘‘attachments’’ for the 

forgoing that, immediately prior to October 

15, 2013, were classified under 9A018.a.1, 

.a.3, .c, .d, .e, or .f. (2) See ECCN 9E619 for 

‘‘technology’’ related to military trainer 

aircraft turbo prop engines and ‘‘parts’’ and 

‘‘components’’ therefor that, immediately 

prior to October 15, 2013, were classified 

under ECCN 9A018.a.2 or .a.3. 

Related Definitions: * * * 

Items: * * * 

■ 73. In Supplement No. 1 to part 774, 

Category 9, add new Export Control 

Classification Numbers 9A610 and 

9A619 between Export Control 

Classification Numbers 9A120 and 

9A980 to read as follows: 

9A610 Military aircraft and related 

commodities. 

License Requirements 

Reason for Control: NS, RS, MT, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry except 

9A610.u, .v, .w, 

and .y.

NS Column 1 

RS applies to entire 

entry except 

9A610.y.

RS Column 1 

Control(s) Country chart 

MT applies to 

9A610.u, .v, and .w.

MT Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 

9A610.y.

See § 746.1(b) for UN 

controls 

License Exceptions 

LVS: $1500 

GBS: N/A 

CIV: N/A 

STA: (1) Paragraph (c)(1) of License 

Exception STA (§ 740.20(c)(1) of the EAR) 

may not be used for any item in 9A610.a 

(i.e., ‘‘end item’’ military aircraft), unless 

determined by BIS to be eligible for 

License Exception STA in accordance with 

§ 740.20(g) (License Exception STA 

eligibility requests for ‘‘600 series’’ end 

items). (2) Paragraph (c)(2) of License 

Exception STA (§ 740.20(c)(2) of the EAR) 

may not be used for any item in 9A610. 

List of Items Controlled 

Unit: ‘‘End items’’ in number; ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ in $ value 

Related Controls: Military aircraft and related 

articles that are enumerated in USML 

Category VIII, and technical data 

(including software) directly related 

thereto, are subject to the ITAR. See ECCN 

0A919 for controls on foreign-made 

‘‘military commodities’’ that incorporate 

more than a de minimis amount of U.S.- 

origin ‘‘600 series’’ controlled content. 

Related Definitions: N/A 

Items: 

a. ‘Military Aircraft’ ‘‘specially designed’’ 

for a military use that are not enumerated in 

USML paragraph VIII(a). 

Note 1: For purposes of paragraph .a the 

term ‘military aircraft’ includes the following 

types of aircraft to the extent they were 

‘‘specially designed’’ for a military use, and 

are not enumerated in USML paragraph 

VIII(a): trainer aircraft; cargo aircraft; utility 

fixed wing aircraft; military helicopters; 

observation aircraft; military non-expansive 

balloons and other lighter than air aircraft, 

and unarmed military aircraft, regardless of 

origin or designation. Aircraft with 

modifications made to incorporate safety of 

flight features or other FAA or NTSB 

modifications such as transponders and air 

data recorders are ‘‘unmodified’’ for the 

purposes of this paragraph .a. 

Note 2: 9A610.a does not control ’ military 

aircraft’ that: 

a. Were first manufactured before 1946; 

b. Do not incorporate defense articles 

enumerated on the U.S. Munitions List, 

unless the items are required to meet safety 

or airworthiness standards of a Wassenaar 

Arrangement Participating State; and 

c. Do not incorporate weapons enumerated 

on the U.S. Munitions List, unless inoperable 

and incapable of being returned to operation. 

b. [Reserved]. 

c. [Reserved]. 

d. [Reserved]. 

e. [Reserved]. 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22731 

f. ‘Ground equipment’ ‘‘specially 

designed’’ for aircraft controlled by either 

USML paragraph VIII(a) or ECCN 9A610.a. 

Technical Note: ‘Ground equipment’ 

includes pressure refueling equipment and 

equipment designed to facilitate operations 

in confined areas. 

g. Aircrew life support equipment, aircrew 

safety equipment and other devices for 

emergency escape from aircraft controlled by 

either USML paragraph VIII(a) or ECCN 

9A610.a. 

h. Parachutes, paragliders, complete 

canopies, harnesses, platforms, electronic 

release mechanisms ‘‘specially designed’’ for 

use with aircraft controlled by either USML 

paragraph VIII(a) or ECCN 9A610.a, and 

‘‘equipment’’ ‘‘specially designed’’ for 

military high altitude parachutists, such as 

suits, special helmets, breathing systems, and 

navigation equipment. 

i. Controlled opening equipment or 

automatic piloting systems, designed for 

parachuted loads. 

j. Ground effect machines (GEMS), 

including surface effect machines and air 

cushion vehicles, ‘‘specially designed’’ for 

use by a military. 

k. through s. [Reserved] 

t. Military aircraft instrument flight trainers 

that are not ‘‘specially designed’’ to simulate 

combat. (See USML Cat IX for controls on 

such trainers that are ‘‘specially designed’’ to 

simulate combat.) 

u. Apparatus and devices ‘‘specially 

designed’’ for the handling, control, 

activation and non-ship-based launching of 

UAVs or drones controlled by either USML 

paragraph VIII(a) or ECCN 9A610.a, and 

capable of a range equal to or greater than 

300 km. 

v. Radar altimeters designed or modified 

for use in UAVs or drones controlled by 

either USML paragraph VIII(a) or ECCN 

9A610.a., and capable of delivering at least 

500 kilograms payload to a range of at least 

300 km. 

w. Hydraulic, mechanical, electro-optical, 

or electromechanical flight control systems 

(including fly-by-wire systems) and attitude 

control equipment designed or modified for 

UAVs or drones controlled by either USML 

paragraph VIII(a) or ECCN 9A610.a., and 

capable of delivering at least 500 kilograms 

payload to a range of at least 300 km. 

x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

and ‘‘attachments’’ that are ‘‘specially 

designed’’ for a commodity subject to control 

in this ECCN or a defense article in USML 

Category VIII and not elsewhere specified on 

the USML or the CCL. 

Note 1: Forgings, castings, and other 

unfinished products, such as extrusions and 

machined bodies, that have reached a stage 

in manufacturing where they are clearly 

identifiable by mechanical properties, 

material composition, geometry, or function 

as commodities controlled by ECCN 9A610.x 

are controlled by ECCN 9A610.x. 

Note 2: ‘‘Parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ specified 

in USML subcategory VIII(f) or VIII(h) are 

subject to the controls of that paragraph. 

‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ specified in ECCN 9A610.y 

are subject to the controls of that paragraph. 

y. Specific ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially 

designed’’ for a commodity subject to control 

in this ECCN or a defense article in USML 

Category VIII and not elsewhere specified in 

the USML or the CCL, and other aircraft 

commodities ‘‘specially designed’’ for a 

military use, as follows: 

y.1. Aircraft tires; 

y.2. Analog cockpit gauges and indicators; 

y.3. Audio selector panels; 

y.4. Check valves for hydraulic and 

pneumatic systems; 

y.5. Crew rest equipment; 

y.6. Ejection seat mounted survival aids; 

y.7. Energy dissipating pads for cargo (for 

pads made from paper or cardboard); 

y.8. Filters and filter assemblies for 

hydraulic, oil and fuel systems; 

y.9. Galleys; 

y.10. Hydraulic and fuel hoses, straight and 

unbent lines, fittings, clips, couplings, 

nutplates, and brackets; 

y.11. Lavatories; 

y.12. Life rafts; 

y.13. Magnetic compass, magnetic azimuth 

detector; 

y.14. Medical litter provisions; 

y.15. Mirrors, cockpit; 

y.16. Passenger seats including palletized 

seats; 

y.17. Potable water storage systems; 

y.18. Public address (PA) systems; 

y.19. Steel brake wear pads (does not 

include sintered mix or carbon/carbon 

materials); 

y.20. Underwater beacons; 

y.21. Urine collection bags/pads/cups/ 

pumps; 

y.22. Windshield washer and wiper 

systems; 

y.23. Filtered and unfiltered cockpit panel 

knobs, indicators, switches, buttons, and 

dials; 

y.24. Lead-acid and Nickel-Cadmium 

batteries; 

y.25. Propellers, propeller systems, and 

propeller blades used with reciprocating 

engines; 

y.26. Fire extinguishers; 

y.27. Flame and smoke/CO2 detectors; and 

y.28. Map cases. 

y.29. ‘Military Aircraft’ that were first 

manufactured from 1946 to 1955 that do not 

incorporate defense articles enumerated on 

the U.S. Munitions List, unless the items are 

required to meet safety or airworthiness 

standards of a Wassenaar Arrangement 

Participating State; and do not incorporate 

weapons enumerated on the U.S. Munitions 

List, unless inoperable and incapable of 

being returned to operation. 

9A619 Military gas turbine engines and 

related commodities. 

License Requirements 

Reason for Control: NS, RS, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry except 

9A619.y.

NS Column 1 

RS applies to entire 

entry except 

9A619.y.

RS Column 1 

Control(s) Country chart 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 

9A619.y.

See § 746.1(b) for UN 

controls 

License Exceptions 

LVS: $1,500 

GBS: N/A 

CIV: N/A 

STA: Paragraph (c)(2) of License Exception 

STA (§ 740.20(c)(2) of the EAR) may not be 

used for any item in ECCN 9A619. 

List of Items Controlled 

Unit: ‘‘End items’’ in number; ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ in $ value. 

Related Controls: (1) Military gas turbine 

engines and related articles that are 

enumerated in USML Category XIX, and 

technical data (including software) directly 

related thereto, are subject to the 

jurisdiction of the International Traffic in 

Arms Regulations (ITAR). (2) See ECCN 

0A919 for foreign-made ‘‘military 

commodities’’ that incorporate more than a 

de minimis amount of U.S.-origin ‘‘600 

series’’ controlled content. 

Related Definitions: N/A 

Items: 

a. ‘‘Military Gas Turbine Engines’’ 

‘‘specially designed’’ for a military use that 

are not controlled in USML Category XIX(a), 

(b), (c), or (d). 

Note: For purposes of ECCN 9A619.a, the 

term ‘‘military gas turbine engines’’ means 

gas turbine engines ‘‘specially designed’’ for 

‘‘end items’’ enumerated in USML Category 

VIII or on the CCL under ECCN 9A610. 

b. Digital engine controls (e.g., Full 

Authority Digital Engine Controls (FADEC) 

and Digital Electronic Engine Controls 

(DEEC)) ‘‘specially designed’’ for gas turbine 

engines controlled in this ECCN 9A619. 

c. If ‘‘specially designed’’ for gas turbine 

engines controlled in 9A619.a, hot section 

components (i.e., combustion chambers and 

liners; high pressure turbine blades, vanes, 

disks and related cooled structure; cooled 

low pressure turbine blades, vanes, disks and 

related cooled structure; cooled augmenters; 

and cooled nozzles); 

d. If ‘‘specially designed’’ for gas turbine 

engines controlled in 9A619.a, uncooled 

turbine blades, vanes, disks, and tip shrouds; 

e. If ‘‘specially designed’’ for gas turbine 

engines controlled in 9A619.a, combustor 

cowls, diffusers, domes, and shells; 

Note: Forgings, castings, and other 

unfinished products, such as extrusions and 

machined bodies, that have reached a stage 

in manufacturing where they are clearly 

identifiable by mechanical properties, 

material composition, geometry, or function 

as commodities controlled by ECCN 9A619.c 

are controlled by ECCN 9A619.c. 

f. Engine monitoring systems (i.e., those 

that conduct prognostics, diagnostics, and 

monitor health) ‘‘specially designed’’ for gas 

turbine engines and components controlled 

in this ECCN 9A619. 

g. through w. [Reserved] 

mstockstill on DSK4VPTVN1PROD with RULES3

22732 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

x. ‘‘Parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

and ‘‘attachments’’ that are ‘‘specially 

designed’’ for a commodity controlled by this 

ECCN 9A619 (other than ECCN 9A619.c) or 

for a defense article enumerated in USML 

Category XIX and not specified elsewhere in 

the CCL or on the USML. 

Note 1: Forgings, castings, and other 

unfinished products, such as extrusions and 

machined bodies, that have reached a stage 

in manufacturing where they are clearly 

identifiable by mechanical properties, 

material composition, geometry, or function 

as commodities controlled by ECCN 9A619.x 

are controlled by ECCN 9A619.x. 

Note 2: ‘‘Parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ specified 

in USML subcategory XIX(f) are subject to the 

controls of that paragraph. ‘‘Parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ specified in ECCN 9A619.y 

are subject to the controls of that paragraph. 

y. Specific ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially 

designed’’ for a commodity subject to control 

in this ECCN 9A619 or for a defense article 

in USML Category XIX and not elsewhere 

specified on the USML or in the CCL, and 

other aircraft commodities, as follows: 

y.1. Oil tank and reservoirs; 

y.2. Oil lines and tubes; 

y.3. Fuel lines and hoses; 

y.4. Fuel and oil filters; 

y.5. V-Band, cushion, ‘‘broomstick,’’ 

hinged, and loop clamps; 

y.6. Shims; 

y.7. Identification plates; 

y.8. Air, fuel, and oil manifolds. 

■ 74. In Supplement No. 1 to part 774, 

Category 9, add new ECCNs 9B610 and 

9B619 between ECCNs 9B117 and 

9B990 to read as follows: 

9B610 Test, inspection, and production 

‘‘equipment’’ and related commodities 

‘‘specially designed’’ for the 

‘‘development’’ or ‘‘production’’ of 

commodities enumerated in ECCN 

9A610 or USML Category VIII. 

License Requirements 

Reason for Control: NS, RS, MT, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry except 

9B610.c.

NS Column 1 

RS applies to entire 

entry.

RS Column 1 

MT applies to 

9B610.c.

MT Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls 

License Exceptions 

LVS: $1500 

GBS: N/A 

CIV: N/A 

STA: Paragraph (c)(2) of License Exception 

STA (§ 740.20(c)(2) of the EAR) may not be 

used for any item in 9B610. 

List of Items Controlled 

Unit: N/A 

Related Controls: USML Category VIII(h)(i) 

controls parts, components, accessories, 

and attachments specially designed for 

various models of stealth and lowobservable aircraft. 

Related Definitions: N/A 

Items: 

a. Test, inspection, and production 

‘‘equipment’’ ‘‘specially designed’’ for the 

‘‘production,’’ ‘‘development,’’ repair, 

overhaul, or refurbishment of commodities 

enumerated in ECCN 9A610 (except 9A610.y) 

or USML Category VIII, and ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ ‘‘specially designed’’ therefor. 

b. Environmental test facilities ‘‘specially 

designed’’ for the certification, qualification, 

or testing of commodities enumerated in 

ECCN 9A610 (except for 9A610.y) or USML 

Category VIII and ‘‘parts,’’ ‘‘components,’’ 

‘‘accessories,’’ and ‘‘attachments’’ ‘‘specially 

designed’’ therefor. 

c. ‘‘Production facilities’’ designed or 

modified for UAVs or drones that are (i) 

controlled by either USML paragraph VIII(a) 

or ECCN 9A610.a and (ii) capable of a range 

equal to or greater than 300 km. 

9B619 Test, inspection, and production 

‘‘equipment’’ and related commodities 

‘‘specially designed’’ for the 

‘‘development’’ or ‘‘production’’ of 

commodities enumerated in ECCN 

9A619 or USML Category XIX. 

License Requirements 

Reason for Control: NS, RS, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry except 

9B619.y.

NS Column 1 

RS applies to entire 

entry except 

9B619.y.

RS Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 

9B619.y.

See § 746.1(b) for UN 

controls 

License Exceptions 

LVS: $1,500 

GBS: N/A 

CIV: N/A 

STA: Paragraph (c)(2) of License Exception 

STA (§ 740.20(c)(2) of the EAR) may not be 

used for any item in ECCN 9B619. 

List of Items Controlled 

Unit: $ value 

Related Controls: N/A 

Related Definitions: N/A 

Items: 

a. Test, inspection, and production 

‘‘equipment’’ ‘‘specially designed’’ for the 

‘‘production,’’ ‘‘development,’’ repair, 

overhaul, or refurbishment of commodities 

enumerated in ECCN 9A619 (except for 

9A619.y) or in USML Category XIX, and 

‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ ‘‘specially designed’’ therefor. 

b. Equipment, cells, or stands ‘‘specially 

designed’’ for testing, analysis and fault 

isolation of engines, ‘‘systems,’’ 

‘‘components,’’ ‘‘parts,’’ ‘‘accessories,’’ and 

‘‘attachments’’ specified in ECCN 9A619 on 

the CCL or in Category XIX on the USML. 

c. through x. [Reserved] 

y. Bearing pullers ‘‘specially designed’’ for 

the -‘‘production’’ or ‘‘development’’ of 

commodities enumerated in ECCN 9A619 

(except for 9A619.y) or USML Category XIX 

and ‘‘parts,’’ ‘‘components,’’ ‘‘accessories,’’ 

and ‘‘attachments’’ ‘‘specially designed’’ 

therefor. 

■ 75. In Supplement No. 1 to part 774, 

Category 9, add new ECCNs 9C610 and 

9C619 between ECCNs 9C110 and the 

product group header that reads ‘‘D. 

Software’’ to read as follows: 

9C610 Materials ‘‘specially designed’’ for 

commodities controlled by 9A610 not 

elsewhere specified in the CCL or the 

USML. 

License Requirements 

Reason for Control: NS, RS, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry.

NS Column 1 

RS applies to entire 

entry.

RS Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls 

License Exceptions 

LVS: $1500 

GBS: N/A 

CIV: N/A 

STA: Paragraph (c)(2) of License Exception 

STA (§ 740.20(c)(2) of the EAR) may not be 

used for any item in 9C610. 

List of Items Controlled 

Unit: N/A 

Related Controls: USML subcategory XIII(f) 

controls structural materials specifically 

designed, developed, configured, modified, 

or adapted for defense articles, such as 

USML subcategory VIII(a) aircraft. See 

ECCN 0A919 for foreign made ‘‘military 

commodities’’ that incorporate more than a 

de minimis amount of U.S.-origin ‘‘600 

series’’ controlled content. 

Related Definitions: N/A 

Items: 

a. Materials not elsewhere specified in the 

USML or the CCL and ‘‘specially designed’’ 

for commodities enumerated in ECCN 9A610 

(except 9A610.y). 

Note 1: Materials enumerated elsewhere in 

the CCL, such as in a CCL Category 1 ECCN, 

are controlled pursuant to controls of the 

applicable ECCN. 

Note 2: Materials ‘‘specially designed’’ for 

both aircraft enumerated in USML Category 

VIII and aircraft enumerated in ECCN 9A610 

are subject to the controls of this ECCN. 

b. [Reserved]. 

9C619 Materials ‘‘specially designed’’ for 

commodities controlled by 9A619 not 

elsewhere specified in the CCL or on the 

USML. 

mstockstill on DSK4VPTVN1PROD with RULES3

Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22733 

License Requirements 

Reason for Control: NS, RS, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry.

NS Column 1 

RS applies to entire 

entry.

RS Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry.

See § 746.1(b) for UN 

controls 

License Exceptions 

LVS: $1,500 

GBS: N/A 

CIV: N/A 

STA: Paragraph (c)(2) of License Exception 

STA (§ 740.20(c)(2) of the EAR) may not be 

used for any item in ECCN 9C619. 

List of Items Controlled 

Unit: $ value 

Related Controls: (1) See USML subcategory 

XIII(f) for controls on structural materials 

specifically designed, developed, 

configured, modified, or adapted for 

defense articles, such as USML Category 

XIX engines. (2) See ECCN 0A919 for 

foreign made ‘‘military commodities’’ that 

incorporate more than a de minimis 

amount of U.S.-origin ‘‘600 series’’ 

controlled content. 

Related Definitions: N/A 

Items: 

a. Materials not elsewhere specified in the 

CCL or on the USML and ‘‘specially 

designed’’ for commodities enumerated in 

ECCN 9A619 (except for 9A619.y). 

Note 1: Materials enumerated elsewhere in 

the CCL, such as in a CCL Category 1 ECCN, 

are controlled pursuant to the controls of the 

applicable ECCN. 

Note 2: Materials ‘‘specially designed’’ for 

both an engine enumerated in USML 

Category XIX and an engine enumerated in 

ECCN 9A619 are subject to the controls of 

this ECCN 9C619. 

b. [Reserved]. 

■ 76. In Supplement No. 1 to part 774, 

Category 9, add new ECCNs 9D610 and 

9D619 between ECCNs 9D105 and 

9D990 to read as follows: 

9D610 Software ‘‘specially designed’’ for 

the ‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of military 

aircraft and related commodities 

controlled by 9A610, equipment 

controlled by 9B610, or materials 

controlled by 9C610. 

License Requirements 

Reason for Control: NS, RS, MT, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry except 

9D610.y.

NS Column 1 

RS applies to entire 

entry except 

9D610.y.

RS Column 1 

Control(s) Country chart 

MT applies to software ‘‘specially designed’’ for the operation, installation, 

maintenance, repair, overhaul, or 

refurbishing of 

commodities controlled for MT reasons in 9A610 or 

9B610.

MT Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 

9D610.y.

See § 746.1(b) for UN 

controls 

License Exceptions 

CIV: N/A 

TSR: N/A 

STA: (1) Paragraph (c)(1) of License 

Exception STA (§ 740.20(c)(1) of the EAR) 

may not be used for 9D610.b. (2) Paragraph 

(c)(2) of License Exception STA 

(§ 740.20(c)(2) of the EAR) may not be used 

for any software in 9D610. 

List of Items Controlled 

Unit: $ value 

Related Controls: Software directly related to 

articles enumerated in USML Category VIII 

is subject to the control of USML paragraph 

VIII(i). 

Related Definitions: N/A 

Items: 

a. ‘‘Software’’ (other than software 

controlled in paragraphs .b or .y of this entry) 

‘‘specially designed’’ for the ‘‘development,’’ 

‘‘production,’’ operation, or maintenance of 

commodities controlled by ECCN 9A610, 

ECCN 9B610, or ECCN 9C610. 

b. ‘‘Software’’ ‘‘specially designed’’ for the 

‘‘development’’ or ‘‘production’’ of any of the 

following: 

b.1. Static structural members; 

b.2. Exterior skins, removable fairings, nonremovable fairings, radomes, access doors 

and panels, and in-flight opening doors; 

b.3. Control surfaces, leading edges, 

trailing edges, and leading edge flap seals; 

b.4. Leading edge flap actuation system 

commodities (i.e., power drive units, rotary 

geared actuators, torque tubes, asymmetry 

brakes, position sensors, and angle 

gearboxes) ‘‘specially designed’’ for fighter, 

attack, or bomber aircraft controlled in USML 

Category VIII; 

b.5. Engine inlets and ducting; 

b.6. Fatigue life monitoring systems 

‘‘specially designed’’ to relate actual usage to 

the analytical or design spectrum and to 

compute amount of fatigue life ‘‘specially 

designed’’ for aircraft controlled by either 

USML subcategory VIII(a) or ECCN 9A610.a, 

except for Military Commercial Derivative 

Aircraft; 

b.7. Landing gear, and ‘‘parts’’ and 

‘‘components’’ ‘‘specially designed’’ therefor, 

‘‘specially designed’’ for use in aircraft 

weighing more than 21,000 pounds 

controlled by either USML subcategory 

VIII(a) or ECCN 9A610.a, except for Military 

Commercial Derivative Aircraft; 

b.8. Conformal fuel tanks and ‘‘parts’’ and 

‘‘components’’ ‘‘specially designed’’ therefor; 

b.9. Electrical ‘‘equipment,’’ ‘‘parts,’’ and 

‘‘components’’ ‘‘specially designed’’ for 

electro-magnetic interference (EMI)—i.e., 

conducted emissions, radiated emissions, 

conducted susceptibility and radiated 

susceptibility—protection of aircraft that 

conform to the requirements of MIL–STD– 

461; 

b.10. HOTAS (Hand-on Throttle and Stick) 

controls, HOCAS (Hands on Collective and 

Stick), Active Inceptor Systems (i.e., a 

combination of Active Side Stick Control 

Assembly, Active Throttle Quadrant 

Assembly, and Inceptor Control Unit), rudder 

pedal assemblies for digital flight control 

systems, and parts and components 

‘‘specially designed’’ therefor; 

b.11. Integrated Vehicle Health 

Management Systems (IVHMS), Condition 

Based Maintenance (CBM) Systems, and 

Flight Data Monitoring (FDM) systems; 

b.12. Equipment ‘‘specially designed’’ for 

system prognostic and health management of 

aircraft; 

b.13. Active Vibration Control Systems; or 

b.14. Self-sealing fuel bladders ‘‘specially 

designed’’ to pass a .50 caliber or larger 

gunfire test (MIL–DTL–5578, MIL–DTL– 

27422). 

c. to x. [RESERVED] 

y. Specific ‘‘software’’ ‘‘specially designed’’ 

for the ‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of commodities 

enumerated in ECCN 9A610.y. 

9D619 Software ‘‘specially designed’’ for 

the ‘‘development,’’ ‘‘production,’’ 

operation or maintenance of military 

gas turbine engines and related 

commodities controlled by 9A619, 

equipment controlled by 9B619, or 

materials controlled by 9C619. 

License Requirements 

Reason for Control: NS, RS, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry except 

9D619.y.

NS Column 1 

RS applies to entire 

entry except 

9D619.y.

RS Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 

9D619.y.

See § 746.1(b) for UN 

controls 

License Exceptions 

CIV: N/A 

TSR: N/A 

STA: (1) Paragraph (c)(1) of License 

Exception STA (§ 740.20(c)(1) of the EAR) 

may not be used for 9D619.b. (2) Paragraph 

(c)(2) of License Exception STA 

(§ 740.20(c)(2) of the EAR) may not be used 

for any software in ECCN 9D619. 

List of Items Controlled 

Unit: $ value 

Related Controls: Software directly related to 

articles enumerated in USML Category XIX 

is subject to the control of USML paragraph 

XIX(g). 

Related Definitions: N/A 

mstockstill on DSK4VPTVN1PROD with RULES3

22734 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

Items: 

a. ‘‘Software’’ (other than software 

controlled in paragraph .b of this entry) 

‘‘specially designed’’ for the ‘‘development,’’ 

‘‘production,’’ operation, or maintenance of 

commodities controlled by ECCN 9A619 

(except 9A619.y), ECCN 9B619 (except 

9B619.y), or ECCN 9C619. 

b. ‘‘Software’’ ‘‘specially designed’’ for the 

‘‘development’’ or ‘‘production’’ of any of the 

following: 

b.1. Front, turbine center, and exhaust 

frames; 

b.2. Low pressure compressor (i.e., fan) 

‘‘components’’ and ‘‘parts’’ as follows: Nose 

cones, casings, blades, vanes, spools, 

shrouds, blisks, shafts and disks; 

b.3. High pressure compressor 

‘‘components’’ and ‘‘parts’’ as follows: 

Casings, blades, vanes, spools, shrouds, 

blisks, shafts, disks, and impellers; 

b.4. Combustor ‘‘components’’ and ‘‘parts’’ 

as follows: Casings, fuel nozzles, swirlers, 

swirler cups, deswirlers, valve injectors, 

igniters, diffusers, liners, chambers, 

cowlings, domes and shells; 

b.5. High pressure turbine ‘‘components’’ 

and ‘‘parts’’ as follows: Casings, shafts, disks, 

blades, vanes, nozzles, and tip shrouds; 

b.6. Low pressure turbine ‘‘components’’ 

and ‘‘parts’’ as follows: Casings, shafts, disks, 

blades, vanes, nozzles, and tip shrouds; 

b.7. Augmentor ‘‘components’’ and ‘‘parts’’ 

as follows: Casings, flame holders, spray bars, 

pilot burners, augmentor fuel controls, flaps 

(external, convergent, and divergent), guide 

and syncronization rings, and flame detectors 

and sensors; 

b.8. Mechanical ‘‘components’’ and ‘‘parts’’ 

as follows: Fuel metering units and fuel 

pump metering units, valves (fuel throttle, 

main metering, oil flow management), heat 

exchangers (air/air, fuel/air, fuel/oil), debris 

monitoring (inlet and exhaust), seals (carbon, 

labyrinth, brush, balance piston, and ‘‘knifeedge’’), permanent magnetic alternator and 

generator, eddy current sensors; 

b.9. Torquemeter assembly (i.e., housing, 

shaft, reference shaft, and sleeve); 

b.10. Digital engine control systems (e.g., 

Full Authority Digital Engine Controls 

(FADEC) and Digital Electronic Engine 

Controls (DEEC)) ‘‘specially designed’’ for gas 

turbine engines controlled in this ECCN; or 

b.11. Engine monitoring systems (i.e., 

prognostics, diagnostics, and health) 

‘‘specially designed’’ for gas turbine engines 

and components controlled in this ECCN. 

c. to x. [RESERVED] 

y. Specific ‘‘software’’ ‘‘specially designed’’ 

for the ‘‘development,’’ ‘‘production,’’ 

operation, or maintenance of commodities 

enumerated in ECCN 9A619.y or 9B619.y. 

■ 77. In Supplement No. 1 to part 774, 

Category 9, add new Export Control 

Classification Numbers 9E610 and 

9E619 between Export Control 

Classification Numbers 9E102 and 

9E990 to read as follows: 

9E610 Technology ‘‘required’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, overhaul, or refurbishing of 

military aircraft and related 

commodities controlled by 9A610, 

equipment controlled by 9B610, 

materials controlled by 9C610, or 

software controlled by 9D610. 

License Requirements 

Reason for Control: NS, RS, MT, AT, UN 

Control(s) Country chart 

NS applies to entire 

entry except 

9E610.y.

NS Column 1 

RS applies to entire 

entry except 

9E610.y.

RS Column 1 

MT applies to ‘‘technology’’ ‘‘required’’ 

for the ‘‘development,’’ ‘‘production,’’ operation, installation, maintenance, repair, overhaul, or refurbishing of commodities or software 

controlled for MT 

reasons in 9A610, 

9B610, or 9D610 

for MT reasons.

MT Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 

9E610.y.

See § 746.1(b) for UN 

controls 

License Exceptions 

CIV: N/A 

TSR: N/A 

STA: (1) Paragraph (c)(1) of License 

Exception STA (§ 740.20(c)(1) of the EAR) 

may not be used for 9E610.b. (2) Paragraph 

(c)(2) of License Exception STA 

(§ 740.20(c)(2) of the EAR) may not be used 

for any technology in 9E610. 

List of Items Controlled 

Unit: $ value 

Related Controls: Technical data directly 

related to articles enumerated in USML 

Category VIII are subject to the control of 

USML paragraph VIII(i). 

Related Definitions: N/A 

Items: 

a. ‘‘Technology’’ (other than technology 

controlled by paragraphs .b or .y of this 

entry) ‘‘required’’ for the ‘‘development,’’ 

‘‘production,’’ operation, installation, 

maintenance, repair, overhaul, or 

refurbishing of commodities or software 

controlled by ECCN 9A610, 9B610, 9C610, or 

9D610. 

Note: ‘‘Build-to-print technology’’ 

‘‘required’’ for the ‘‘production’’ of items 

described in paragraphs b.1 through b.15 of 

this entry is classified under 9E610.a. 

b. ‘‘Technology’’ (other than ‘‘build-toprint technology’’) ‘‘required’’ for the 

‘‘development’’ or ‘‘production’’ of any of the 

following: 

b.1. Static structural members; 

b.2. Exterior skins, removable fairings, nonremovable fairings, radomes, access doors 

and panels, and in-flight opening doors; 

b.3. Control surfaces, leading edges, 

trailing edges, and leading edge flap seals; 

b.4. Leading edge flap actuation system 

commodities (i.e., power drive units, rotary 

geared actuators, torque tubes, asymmetry 

brakes, position sensors, and angle 

gearboxes) ‘‘specially designed’’ for fighter, 

attack, or bomber aircraft controlled in USML 

Category VIII; 

b.5. Engine inlets and ducting; 

b.6. Fatigue life monitoring systems 

‘‘specially designed’’ to relate actual usage to 

the analytical or design spectrum and to 

compute amount of fatigue life ‘‘specially 

designed’’ for aircraft controlled by either 

USML subcategory VIII(a) or ECCN 9A610.a, 

except for Military Commercial Derivative 

Aircraft; 

b.7. Landing gear, and ‘‘parts’’ and 

‘‘components’’ ‘‘specially designed’’ therefor, 

‘‘specially designed’’ for use in aircraft 

weighing more than 21,000 pounds 

controlled by either USML subcategory 

VIII(a) or ECCN 9A610.a, except for Military 

Commercial Derivative Aircraft; 

b.8. Conformal fuel tanks and ‘‘parts’’ and 

‘‘components’’ ‘‘specially designed’’ therefor; 

b.9. Electrical ‘‘equipment,’’ ‘‘parts,’’ and 

‘‘components’’ ‘‘specially designed’’ for 

electro-magnetic interference (EMI)—i.e., 

conducted emissions, radiated emissions, 

conducted susceptibility and radiated 

susceptibility—protection of aircraft that 

conform to the requirements of MIL–STD– 

461; 

b.10. HOTAS (Hand-on Throttle and Stick) 

controls, HOCAS (Hands on Collective and 

Stick), Active Inceptor Systems (i.e., a 

combination of Active Side Stick Control 

Assembly, Active Throttle Quadrant 

Assembly, and Inceptor Control Unit), rudder 

pedal assemblies for digital flight control 

systems, and parts and components 

‘‘specially designed’’ therefor; 

b.11. Integrated Vehicle Health 

Management Systems (IVHMS), Condition 

Based Maintenance (CBM) Systems, and 

Flight Data Monitoring (FDM) systems; 

b.12. Equipment ‘‘specially designed’’ for 

system prognostic and health management of 

aircraft; 

b.13. Active Vibration Control Systems; or 

b.14. Self-sealing fuel bladders ‘‘specially 

designed’’ to pass a .50 caliber or larger 

gunfire test (MIL–DTL–5578, MIL–DTL– 

27422). 

c. through x. [Reserved] 

y. Specific ‘‘technology’’ ‘‘required’’ for the 

‘‘production,’’ ‘‘development,’’ operation, 

installation, maintenance, repair, overhaul, 

or refurbishing of commodities or software 

enumerated in ECCN 9A610.y or 9D610.y. 

9E619 ‘‘Technology’’ ‘‘required’’ for the 

‘‘development,’’ ‘‘production,’’ 

operation, installation, maintenance, 

repair, overhaul, or refurbishment of 

military gas turbine engines and related 

commodities controlled by 9A619, 

equipment controlled by 9B619, 

materials controlled by 9C619, or 

software controlled by 9D619. 

License Requirements 

Reason for Control: NS, RS, AT, UN 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22735 

Control(s) Country chart 

NS applies to entire 

entry except 

9E619.y.

NS Column 1 

RS applies to entire 

entry except 

9E619.y.

RS Column 1 

AT applies to entire 

entry.

AT Column 1 

UN applies to entire 

entry except 

9E619.y.

See § 746.1(b) for UN 

controls 

License Exceptions 

CIV: N/A 

TSR: N/A 

STA: (1) Paragraph (c)(1) of License 

Exception STA (§ 740.20(c)(1) of the EAR) 

may not be used for 9E619.b. or .c. (2) 

Paragraph (c)(2) of License Exception STA 

(§ 740.20(c)(2) of the EAR) may not be used 

for any technology in ECCN 9E619. 

List of Items Controlled 

Unit: $ value 

Related Controls: (1) Technical data directly 

related to articles enumerated in USML 

Category XIX are subject to the control of 

USML Category XIX(g). (2) Technology 

described in ECCN 9E003 is controlled by 

that ECCN. 

Related Definitions: N/A 

Items: 

a. ‘‘Technology’’ (other than ‘‘technology’’ 

controlled by paragraphs .b and .c of this 

entry) ‘‘required’’ for the ‘‘development,’’ 

‘‘production,’’ operation, installation, 

maintenance, repair, overhaul, or 

refurbishment of items controlled by ECCN 

9A619 (except 9A619.y), ECCN 9B619 

(except 9B619.y), ECCN 9C619, or ECCN 

9D619 (except 9D619.y). 

Note: ‘‘Build-to-print technology’’ 

‘‘required’’ for the ‘‘production’’ of items 

described in paragraphs b.1 through b.9 of 

this entry is classified under 9E619.a. 

b. ‘‘Technology’’ (other than ‘‘build-toprint technology’’) ‘‘required’’ for the 

‘‘development’’ or ‘‘production’’ of any of the 

following: 

b.1. Front, turbine center, and exhaust 

frames; 

b.2. Low pressure compressor (i.e., fan) 

‘‘components’’ and ‘‘parts’’ as follows: nose 

cones and casings; 

b.3. High pressure compressor 

‘‘components’’ and ‘‘parts’’ as follows: 

casings; 

b.4. Combustor ‘‘components’’ and ‘‘parts’’ 

as follows: casings, fuel nozzles, swirlers, 

swirler cups, deswirlers, valve injectors, and 

igniters; 

b.5. High pressure turbine ‘‘components’’ 

and ‘‘parts’’ as follows: casings; 

b.6. Low pressure turbine ‘‘components’’ 

and ‘‘parts’’ as follows: casings; 

b.7. Augmentor ‘‘components’’ and ‘‘parts’’ 

as follows: casings, flame holders, spray bars, 

pilot burners, augmentor fuel controls, flaps 

(external, convergent, and divergent), guide 

and syncronization rings, and flame detectors 

and sensors; 

b.8. Mechanical ‘‘components’’ and ‘‘parts’’ 

as follows: fuel metering units and fuel pump 

metering units, valves (fuel throttle, main 

metering, oil flow management), heat 

exchangers (air/air, fuel/air, fuel/oil), debris 

monitoring (inlet and exhaust), seals (carbon, 

labyrinth, brush, balance piston, and ‘‘knifeedge’’), permanent magnetic alternator and 

generator, eddy current sensors; or 

b.9. Torquemeter assembly (i.e., housing, 

shaft, reference shaft, and sleeve). 

c. ‘‘Technology’’ ‘‘required’’ for the 

‘‘development’’ or ‘‘production’’ of any of the 

following: 

c.1. Low pressure compressor (i.e., fan) 

‘‘components’’ and ‘‘parts’’ as follows: 

blades, vanes, spools, shrouds, blisks, shafts 

and disks; 

c.2. High pressure compressor 

‘‘components’’ and ‘‘parts’’ as follows: 

blades, vanes, spools, shrouds, blisks, shafts, 

disks, and impellers; 

c.3. Combustor ‘‘components’’ and ‘‘parts’’ 

as follows: diffusers, liners, chambers, 

cowlings, domes and shells; 

c.4. High pressure turbine ‘‘components’’ 

and ‘‘parts’’ as follows: shafts and disks, 

blades, vanes, nozzles, tip shrouds; 

c.5. Low pressure turbine ‘‘components’’ 

and ‘‘parts’’ as follows: shafts and disks, 

blades, vanes, nozzles, tip shrouds; 

c.6. Digital engine control systems (e.g., 

Full Authority Digital Engine Controls 

(FADEC) and Digital Electronic Engine 

Controls (DEEC)) ‘‘specially designed’’ for gas 

turbine engines controlled in this ECCN; or 

c.7. Engine monitoring systems (i.e., 

prognostics, diagnostics, and health) 

‘‘specially designed’’ for gas turbine engines 

and components controlled in this ECCN. 

d. through x. [Reserved] 

y. Specific ‘‘technology’’ ‘‘required’’ for the 

‘‘development,’’ ‘‘production,’’ operation, 

installation, maintenance, repair, overhaul, 

or refurbishment of commodities controlled 

by 9A619.y or 9B619.y, or ‘‘software’’ 

controlled by ECCN 9D619.y. 

■ 78. Add Supplement No. 4 to Part 774, 

to read as follows: 

Supplement No. 4 to Part 774— 

Commerce Control List Order of Review 

(a) As described in EAR § 734.3, the 

EAR govern only items ‘‘subject to the 

EAR,’’ e.g., items not subject to the 

exclusive jurisdiction of another agency. 

Thus, for example, if an item is 

described in the U.S. Munitions List 

(USML) (22 CFR Part 121) of the 

International Traffic in Arms 

Regulations (ITAR) (22 CFR Parts 120– 

130), including one of its catch-all 

paragraphs, then the item is a ‘‘defense 

article’’ subject to the ITAR and there is 

no need to review the CCL with respect 

to whether it describes the item. See 22 

CFR § 120.6 (‘‘Defense article means any 

item or technical data designated in 

§ 121.1 of the ITAR. The policy 

described in § 120.3 is applicable to 

designations of additional items’’). If an 

item is not described on the USML and 

is otherwise ‘‘subject to the EAR,’’ then 

work through each of the following 

steps to determine where the item is 

covered by the CCL or, if it is not 

covered by the CCL, and is therefore 

designated as EAR99. 

(1) Step 1. To classify an item ‘‘subject 

to the EAR’’ against the CCL, review the 

general characteristics of the item. This 

will usually guide you to the 

appropriate category (0 through 9) on 

the CCL. 

(2) Step 2. Once the potentially 

applicable CCL categories are identified, 

determine which product group within 

the CCL category or categories—i.e., A, 

B, C, D, or E—is applicable to the item. 

(3) Step 3. The ‘‘600 series’’ describes 

military items that were once subject to 

the ITAR. Just as the ITAR effectively 

trumps the EAR, items described in a 

‘‘600 series’’ ECCN trump other ECCNs 

on the CCL. Thus, the next step in 

conducting a classification analysis of 

an item ‘‘subject to the EAR’’ is to 

determine whether it is described in a 

‘‘600 series’’ ECCN paragraph other than 

a ‘‘catch-all’’ paragraph such as a ‘‘.x’’ 

paragraph that controls unspecified 

‘‘parts’’ and ‘‘components’’ ‘‘specially 

designed’’ for items in that ECCN or the 

corresponding USML paragraph. If so, 

the item is classified under that ‘‘600 

series’’ ECCN paragraph. 

(4) Step 4. If the item is not described 

in a ‘‘600 series’’ ECCN, then determine 

whether the item is classified under a 

‘‘600 series’’ catch-all paragraph, i.e., 

one that controls non-specific ‘‘parts,’’ 

‘‘components,’’ ‘‘accessories,’’ and 

‘‘attachments’’ ‘‘specially designed’’ for 

items in that ECCN or the corresponding 

USML paragraph. Such items are 

generally in the ‘‘.x’’ paragraph of the 

‘‘600 series’’ ECCNs. 

(i) Step 4.a. Determine whether the 

item would meet the criteria of either 

paragraphs (a)(1) or (a)(2) of the 

‘‘specially designed’’ definition in 

§ 772.1 of the EAR. (These are 

informally known as the ‘‘catch’’ 

paragraphs.) If not applicable, then the 

item is not within the scope of the 

ECCN paragraph that contains a 

‘‘specially designed’’ control parameter. 

Skip to Step 5. 

(ii) Step 4.b. If the item meets the 

criteria of either paragraph (a)(1) or 

(a)(2) of the ‘‘specially designed’’ 

definition, then determine whether any 

of the provisions of paragraph (b) of the 

‘‘specially designed’’ definition would 

apply. (These are informally known as 

the ‘‘release’’ provisions.) If so, then the 

item is not within the scope of the 

ECCN paragraph that contains a 

‘‘specially designed’’ control parameter. 

Note to paragraph (a)(4): The emphasis on 

the word ‘‘control’’ in Steps 4.a and 4.b is 

deliberate. Some ECCNs use ‘‘specially 

designed’’ as a de-control parameter. If an 

item would not be classified under a 

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22736 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

particular ECCN because it falls within the 

scope of either subparagraph (a)(1) or (a)(2) 

of the ‘‘specially designed’’ definition, then 

there is no need to analyze whether any 

element of paragraph (b) of the definition 

would apply to the item. One needs only 

review the ‘‘release’’ provisions in paragraph 

(b) of the ‘‘specially designed’’ definition if 

paragraph (a) of the ‘‘specially designed’’ 

definition applies to the item in a ‘‘control’’ 

paragraph of an ECCN that uses the term 

‘‘specially designed.’’ 

(5) Step 5. If an item is not classified 

by a ‘‘600 series’’ ECCN, then starting 

from the beginning of the product group 

analyze each ECCN to determine 

whether any other ECCN in that product 

group describes the item. If any ECCN 

uses the term ‘‘specially designed,’’ see 

Steps 4a and 4b above in paragraphs 

(a)(4)(i) and (a)(4)(ii) respectively. If the 

item is described in one of these ECCNs, 

then the item is classified under that 

ECCN. 

(6) Step 6. If the item is not described 

under any ECCN of any category of the 

CCL, then the item is designated as 

EAR99. EAR99 items may require a 

license if destined for a prohibited or 

restricted end user, end use or 

destination. See paragraphs (g) through 

(n) of § 732.3 ‘‘Steps Regarding the Ten 

General Prohibitions,’’ or General 

Prohibitions Four through Ten of part 

736 of the EAR for license requirements 

other than those imposed by the CCL. 

(b) [Reserved]. 

■ 79. Part 774 is amended by adding 

Supplement Nos. 6 and 7 to read as 

follows: 

Supplement No. 6 to Part 774— 

Sensitive List 

Note to Supplement No. 6: While the items 

on this list are identified by ECCN rather 

than by Wassenaar Arrangement numbering, 

the item descriptions are drawn directly from 

the Wassenaar Arrangement’s Sensitive List. 

If text accompanies an ECCN below, then the 

Sensitive List is limited to a subset of items 

classified under the specific ECCN or has 

differing parameters. 

(1) Category 1 

(i) 1A002. 

(ii) 1C001. 

(iii) 1C007.c and .d. 

(iv) 1C010.c and .d. 

(v) 1C012. 

(vi) 1D002—‘‘Software’’ for the 

‘‘development’’ of organic ‘‘matrix’’, 

metal ‘‘matrix’’, or carbon ‘‘matrix’’ 

laminates or composites controlled 

under 1A002, 1C007.c, 1C007.d, 

1C010.c or 1C010.d. 

(vii) 1E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of 

equipment and materials controlled 

under 1A002, 1C001, 1C007.c, 1C007.d, 

1C010.c, 1C010.d, or 1C012. 

(viii) 1E002.e and .f. 

(2) Category 2 

(i) 2D001—‘‘Software’’, other than 

that controlled by 2D002, specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment as follows: 

(A) Machine tools for turning (ECCN 

2B001.a) having all of the following: 

(1) Positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; and 

(2) Two or more axes which can be 

coordinated simultaneously for 

‘‘contouring control’’; 

(B) Machine tools for milling (ECCN 

2B001.b) having any of the following: 

(1) Having all of the following: 

(a) Positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; and 

(b) Three linear axes plus one rotary 

axis which can be coordinated 

simultaneously for ‘‘contouring 

control’’; 

(2) Specified by 2B001.b.2.a, 

2B001.b.2.b or 2B001.b.2.c and having a 

positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; or 

(3) A positioning accuracy for jig 

boring machines, with ‘‘all 

compensations available’’, equal to or 

less (better) than 3 mm according to ISO 

230/2 (2006) or national equivalents 

along one or more linear axis; 

(C) Electrical discharge machines 

(EDM) controlled under 2B001.d; 

(D) Deep-hole-drilling machines 

controlled under 2B001.f; 

(E) ‘‘Numerically controlled’’ or 

manual machine tools controlled under 

2B003. 

(ii) 2E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ of ‘‘software’’ specified 

by 2D001 described in this Supplement 

or for the ‘‘development’’ of equipment 

as follows: 

(A) Machine tools for turning (ECCN 

2B001.a) having all of the following: 

(1) Positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; and 

(2) Two or more axes which can be 

coordinated simultaneously for 

‘‘contouring control’’; 

(B) Machine tools for milling (ECCN 

2B001.b) having any of the following: 

(1) Having all of the following: 

(a) Positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; and 

(b) Three linear axes plus one rotary 

axis which can be coordinated 

simultaneously for ‘‘contouring 

control’’; 

(2) Specified by 2B001.b.2.a, 

2B001.b.2.b or 2B001.b.2.c and having a 

positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.6 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; or 

(3) A positioning accuracy for jig 

boring machines, with ‘‘all 

compensations available’’, equal to or 

less (better) than 3 mm according to ISO 

230/2 (2006) or national equivalents 

along one or more linear axis; 

(C) Electrical discharge machines 

(EDM) controlled under 2B001.d; 

(D) Deep-hole-drilling machines 

controlled under 2B001.f; 

(E) ‘‘Numerically controlled’’ or 

manual machine tools controlled under 

2B003. 

(iii) 2E002—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘production’’ of equipment as follows: 

(A) Machine tools for turning (ECCN 

2B001.a) having all of the following: 

(1) Positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; and 

(2) Two or more axes which can be 

coordinated simultaneously for 

‘‘contouring control’’; 

(B) Machine tools for milling (ECCN 

2B001.b) having any of the following: 

(1) Having all of the following: 

(a) Positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; and 

(b) Three linear axes plus one rotary 

axis which can be coordinated 

simultaneously for ‘‘contouring 

control’’; 

(2) Specified by 2B001.b.2.a, 

2B001.b.2.b or 2B001.b.2.c and having a 

positioning accuracy with ‘‘all 

compensations available’’ equal to or 

less (better) than 3.0 mm according to 

ISO 230/2 (2006) or national equivalents 

along one or more linear axis; or 

(3) A positioning accuracy for jig 

boring machines, with ‘‘all 

compensations available’’, equal to or 

less (better) than 3 mm according to ISO 

230/2 (2006) or national equivalents 

along one or more linear axis; 

(C) Electrical discharge machines 

(EDM) controlled under 2B001.d; 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22737 

(D) Deep-hole-drilling machines 

controlled under 2B001.f; 

(E) ‘‘Numerically controlled’’ or 

manual machine tools controlled under 

2B003. 

(3) Category 3 

(i) 3A002.g.1. 

(ii) 3D001—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment controlled 

under 3A002.g.1. 

(iii) 3E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of 

equipment controlled under 3A002.g.1. 

(4) Category 4 

(i) 4A001.a.2. 

(ii) 4D001—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment controlled 

under ECCN 4A001.a.2 or for the 

‘‘development’’ or ‘‘production’’ of 

‘‘digital computers’’ having an ‘Adjusted 

Peak Performance’ (‘APP’) exceeding 0.5 

Weighted TeraFLOPS (WT). 

(iii) 4E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of any 

of the following equipment or 

‘‘software’’: equipment controlled under 

ECCN 4A001.a.2, ‘‘digital computers’’ 

having an ‘Adjusted Peak Performance’ 

(‘APP’) exceeding 0.5 Weighted 

TeraFLOPS (WT), or ‘‘software’’ 

controlled under the specific provisions 

of 4D001 described in this Supplement. 

(5) Category 5—Part 1 

(i) 5A001.b.3, .b.5, and .h. 

(ii) 5B001.a—Equipment and 

specially designed components or 

accessories therefor, specially designed 

for the ‘‘development’’ or ‘‘production’’ 

of equipment, functions or features 

controlled under 5A001.b.3, b.5, or .h. 

(iii) 5D001.a—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment, functions 

or features controlled under 5A001.b.3, 

b.5, or .h. 

(iv) 5D001.b—‘‘Software’’ specially 

designed or modified to support 

‘‘technology’’ controlled by this 

Supplement’s description of 5E001.a. 

(v) 5E001.a—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of 

equipment, functions or features 

controlled under 5A001.b.3, b.5, or .h or 

‘‘software’’ described in this 

Supplement’s description of 5D001.a. 

(6) Category 6 

(i) 6A001.a.1.b—Systems or 

transmitting and receiving arrays, 

designed for object detection or 

location, having any of the following: 

(A) A transmitting frequency below 5 

kHz or a sound pressure level exceeding 

224 dB (reference 1 mPa at 1 m) for 

equipment with an operating frequency 

in the band from 5 kHz to 10 kHz 

inclusive; 

(B) Sound pressure level exceeding 

224 dB (reference 1 mPa at 1 m) for 

equipment with an operating frequency 

in the band from 10 kHz to 24 kHz 

inclusive; 

(C) Sound pressure level exceeding 

235 dB (reference 1 mPa at 1 m) for 

equipment with an operating frequency 

in the band between 24 kHz and 30 kHz; 

(D) Forming beams of less than 1° on 

any axis and having an operating 

frequency of less than 100 kHz; 

(E) Designed to operate with an 

unambiguous display range exceeding 

5,120 m; or 

(F) Designed to withstand pressure 

during normal operation at depths 

exceeding 1,000 m and having 

transducers with any of the following: 

(1) Dynamic compensation for 

pressure; or 

(2) Incorporating other than lead 

zirconate titanate as the transduction 

element; 

(ii) 6A001.a.1.e. 

(iii) 6A001.a.2.a.1, a.2.a.2, a.2.a.3, 

a.2.a.5, and a.2.a.6. 

(iv) 6A001.a.2.b. 

(v) 6A001.a.2.c—Processing 

equipment, specially designed for real 

time application with towed acoustic 

hydrophone arrays, having ‘‘user 

accessible programmability’’ and time or 

frequency domain processing and 

correlation, including spectral analysis, 

digital filtering and beamforming using 

Fast Fourier or other transforms or 

processes. 

(vi) 6A001.a.2.d. 

(vii) 6A001.a.2.e. 

(viii) 6A001.a.2.f—Processing 

equipment, specially designed for real 

time application with bottom or bay 

cable systems, having ‘‘user accessible 

programmability’’ and time or frequency 

domain processing and correlation, 

including spectral analysis, digital 

filtering and beamforming using Fast 

Fourier or other transforms or processes. 

(ix) 6A002.a.1.a, a.1.b, and a.1.c. 

(x) 6A002.a.1.d. 

(xi) 6A002.a.2.a—Image intensifier 

tubes having all of the following: 

(A) A peak response in the 

wavelength range exceeding 400 nm but 

not exceeding 1,050 nm; 

(B) Electron image amplification using 

any of the following: 

(1) A microchannel plate for electron 

image amplification with a hole pitch 

(center-to-center spacing) of 12 mm or 

less; or 

(2) An electron sensing device with a 

non-binned pixel pitch of 500 mm or 

less, specially designed or modified to 

achieve ‘charge multiplication’ other 

than by a microchannel plate; and 

(C) Any of the following 

photocathodes: 

(1) Multialkali photocathodes (e.g., 

S–20 and S–25) having a luminous 

sensitivity exceeding 700 mA/lm; 

(2) GaAs or GaInAs photocathodes; or 

(3) Other ‘‘III–V compound’’ 

semiconductor photocathodes having a 

maximum ‘‘radiant sensitivity’’ 

exceeding 10 mA/W. 

(xii) 6A002.a.2.b. 

(xiii) 6A002.a.3—Subject to the 

following additional notes: 

Note 1: 6A002.a.3 does not apply to the 

following ‘‘focal plane arrays’’ in this 

Supplement: 

a. Platinum Silicide (PtSi) ‘‘focal plane 

arrays’’ having less than 10,000 elements; 

b. Iridium Silicide (IrSi) ‘‘focal plane 

arrays.’’ 

Note 2: 6A002.a.3 does not apply to the 

following ‘‘focal plane arrays’’ in this 

Supplement: 

a. Indium Antimonide (InSb) or Lead 

Selenide (PbSe) ‘‘focal plane arrays’’ having 

less than 256 elements; 

b. Indium Arsenide (InAs) ‘‘focal plane 

arrays’’; 

c. Lead Sulphide (PbS) ‘‘focal plane 

arrays’’; 

d. Indium Gallium Arsenide (InGaAs) 

‘‘focal plane arrays.’’ 

Note 3: 6A002.a.3 does not apply to 

Mercury Cadmium Telluride (HgCdTe) ‘‘focal 

plane arrays’’ as follows in this Supplement: 

a. ‘Scanning Arrays’ having any of the 

following: 

1. 30 elements or less; or 

2. Incorporating time delay-and-integration 

within the element and having 2 elements or 

less; 

b. ‘Staring Arrays’ having less than 256 

elements. 

Technical Notes: 

a. ‘Scanning Arrays’ are defined as ‘‘focal 

plane arrays’’ designed for use with a 

scanning optical system that images a scene 

in a sequential manner to produce an image; 

b. ‘Staring Arrays’ are defined as ‘‘focal 

plane arrays’’ designed for use with a nonscanning optical system that images a scene. 

Note 6: 6A002.a.3 does not apply to the 

following ‘‘focal plane arrays’’ in this List: 

a. Gallium Arsenide (GaAs) or Gallium 

Aluminum Arsenide (GaAlAs) quantum well 

‘‘focal plane arrays’’ having less than 256 

elements; 

b. Microbolometer ‘‘focal plane arrays’’ 

having less than 8,000 elements. 

Note 7: 6A002.a.3.g does not apply to the 

linear (1-dimensional) ‘‘focal plane arrays’’ 

specially designed or modified to achieve 

‘charge multiplication’ having 4,096 elements 

or less. 

Note 8: 6A002.a.3.g. does not apply to the 

non-linear (2-dimensional) ‘‘focal plane 

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22738 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

arrays’’ specially designed or modified to 

achieve ‘charge multiplication’ having a 

maximum linear dimension of 4,096 

elements and a total of 250,000 elements or 

less. 

(xiv) 6A002.b. 

(xv) 6A002.c—‘Direct view’ imaging 

equipment incorporating any of the 

following: 

(A) Image intensifier tubes having the 

characteristics listed in this 

Supplement’s description of 6A002.a.2.a 

or 6A002.a.2.b; 

(B) ‘‘Focal plane arrays’’ having the 

characteristics listed in this 

Supplement’s description of 6A002.a.3; 

or 

(C) Solid-state detectors having the 

characteristics listed in 6A002.a.1. 

(xvi) 6A003.b.3—Imaging cameras 

incorporating image intensifier tubes 

having the characteristics listed in this 

Supplement’s description of 6A002.a.2.a 

or 6A002.a.2.b 

Note: 6A003.b.3 does not apply to imaging 

cameras specially designed or modified for 

underwater use. 

(xvii) 6A003.b.4—Imaging cameras 

incorporating ‘‘focal plane arrays’’ 

having any of the following: 

(A) Incorporating ‘‘focal plane arrays’’ 

specified by this Supplement’s 

description of 6A002.a.3.a to 

6A002.a.3.e; 

(B) Incorporating ‘‘focal plane arrays’’ 

specified by this Supplement’s 

description of 6A002.a.3.f; or 

(C) Incorporating ‘‘focal plane arrays’’ 

specified by this Supplement’s 

description of 6A002.a.3.g. 

Note 1: ‘Imaging cameras’ described in 

6A003.b.4 include ‘‘focal plane arrays’’ 

combined with sufficient ‘‘signal processing’’ 

electronics, beyond the read out integrated 

circuit, to enable as a minimum the output 

of an analog or digital signal once power is 

supplied. 

Note 2: 6A003.b.4.a does not control 

imaging cameras incorporating linear ‘‘focal 

plane arrays’’ with twelve 12 elements or 

fewer, not employing time-delay-andintegration within the element, and designed 

for any of the following: 

a. Industrial or civilian intrusion alarm, 

traffic or industrial movement control or 

counting systems; 

b. Industrial equipment used for inspection 

or monitoring of heat flows in buildings, 

equipment or industrial processes; 

c. Industrial equipment used for 

inspection, sorting or analysis of the 

properties of materials; 

d. Equipment specially designed for 

laboratory use; or 

e. Medical equipment. 

Note 3: 6A003.b.4.b does not control 

imaging cameras having any of the following 

characteristics: 

a. A maximum frame rate equal to or less 

than 9 Hz; 

b. Having all of the following: 

1. Having a minimum horizontal or vertical 

‘Instantaneous-Field-of-View (IFOV)’ of at 

least 10 mrad/pixel (milliradians/pixel); 

2. Incorporating a fixed focal-length lens 

that is not designed to be removed; 

3. Not incorporating a ‘direct view’ display; 

and 

Technical Note: ‘Direct view’ refers to an 

imaging camera operating in the infrared 

spectrum that presents a visual image to a 

human observer using a near-to-eye micro 

display incorporating any light-security 

mechanism. 

4. Having any of the following: 

a. No facility to obtain a viewable image of 

the detected field-of-view; or 

b. The camera is designed for a single kind 

of application and designed not to be user 

modified; or 

Technical Note: ‘Instantaneous Field of 

View (IFOV)’ specified in Note 3.b is the 

lesser figure of the ‘Horizontal FOV’ or the 

‘Vertical FOV’. 

‘Horizontal IFOV’ = horizontal Field of 

View (FOV)/number of horizontal detector 

elements 

‘Vertical IFOV’= vertical Field of View 

(FOV)/number of vertical detector elements. 

c. Where the camera is specially designed 

for installation into a civilian passenger land 

vehicle of less than 3 tonnes three tons (gross 

vehicle weight) and having all of the 

following: 

1. Is operable only when installed in any 

of the following: 

a. The civilian passenger land vehicle for 

which it was intended; or 

b. A specially designed, authorized 

maintenance test facility; and 

2. Incorporates an active mechanism that 

forces the camera not to function when it is 

removed from the vehicle for which it was 

intended. 

Note: When necessary, details of the items 

will be provided, upon request, to the Bureau 

of Industry and Security in order to ascertain 

compliance with the conditions described in 

Note 3.b.4 and Note 3.c in this Note to 

6A003.b.4.b. 

Note 4: 6A003.b.4.c does not apply to 

‘imaging cameras’ having any of the 

following characteristics: 

a. Having all of the following: 

1. Where the camera is specially 

designed for installation as an integrated 

component into indoor and wall-plugoperated systems or equipment, limited 

by design for a single kind of 

application, as follows: 

a. Industrial process monitoring, 

quality control, or analysis of the 

properties of materials; 

b. Laboratory equipment specially 

designed for scientific research; 

c. Medical equipment; 

d. Financial fraud detection 

equipment; and 

2. Is only operable when installed in 

any of the following: 

a. The system(s) or equipment for 

which it was intended; or 

b. A specially designed, authorized 

maintenance facility; and 

3. Incorporates an active mechanism 

that forces the camera not to function 

when it is removed from the system(s) 

or equipment for which it was intended; 

b. Where the camera is specially 

designed for installation into a civilian 

passenger land vehicle of less than 3 

tonnes (gross vehicle weight), or 

passenger and vehicle ferries having a 

length overall (LOA) 65 m or greater, 

and having all of the following: 

1. Is only operable when installed in 

any of the following: 

a. The civilian passenger land vehicle 

or passenger and vehicle ferry for which 

it was intended; or 

b. A specially designed, authorized 

maintenance test facility; and 

2. Incorporates an active mechanism 

that forces the camera not to function 

when it is removed from the vehicle for 

which it was intended; 

c. Limited by design to have a 

maximum ‘‘radiant sensitivity’’ of 10 

mA/W or less for wavelengths 

exceeding 760 nm, having all of the 

following: 

1. Incorporating a response limiting 

mechanism designed not to be removed 

or modified; and 

2. Incorporates an active mechanism 

that forces the camera not to function 

when the response limiting mechanism 

is removed; and 

3. Not specially designed or modified 

for underwater use; or 

d. Having all of the following: 

1. Not incorporating a ‘direct view’ or 

electronic image display; 

2. Has no facility to output a viewable 

image of the detected field of view; 

3. The ‘‘focal plane array’’ is only 

operable when installed in the camera 

for which it was intended; and 

4. The ‘‘focal plane array’’ 

incorporates an active mechanism that 

forces it to be permanently inoperable 

when removed from the camera for 

which it was intended. 

Note: When necessary, details of the item 

will be provided, upon request, to the Bureau 

of Industry and Security in order to ascertain 

compliance with the conditions described in 

Note 4 above. 

Note 5: 6A003.b.4.c does not apply to 

imaging cameras specially designed or 

modified for underwater use. 

(xviii) 6A003.b.5. 

(xix) 6A004.c. 

(xx) 6A004.d. 

(xxi) 6A006.a.1. 

(xxii) 6A006.a.2—‘‘Magnetometers’’ 

using optically pumped or nuclear 

precession (proton/Overhauser) 

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Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 22739 

‘‘technology’’ having a ‘sensitivity’ 

lower (better) than 2 pT (rms) per square 

root Hz. 

(xxiii) 6A006.c.1—‘‘Magnetic 

gradiometers’’ using multiple 

‘‘magnetometers’’ specified by 

6A006.a.1 or this Supplement’s 

description of 6A006.a.2. 

(xxiv) 6A006.d—‘‘Compensation 

systems’’ for the following: 

(A) Magnetic sensors specified by 

6A006.a.2 and using optically pumped 

or nuclear precession (proton/ 

Overhauser) ‘‘technology’’ that will 

permit these sensors to realize a 

‘sensitivity’ lower (better) than 2 pT rms 

per square root Hz. 

(B) Underwater electric field sensors 

specified by 6A006.b. 

(C) Magnetic gradiometers specified 

by 6A006.c. that will permit these 

sensors to realize a ‘sensitivity’ lower 

(better) than 3 pT/m rms per square root 

Hz. 

(xxv) 6A006.e—Underwater 

electromagnetic receivers incorporating 

magnetometers specified by 6A006.a.1 

or this Supplement’s description of 

6A006.a.2. 

(xxvi) 6A008.d, .h, and .k. 

(xxvii) 6B008. 

(xxviii) 6D001—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment specified by 

6A004.c, 6A004.d, 6A008.d, 6A008.h, 

6A008.k, or 6B008. 

(xxix) 6D003.a. 

(xxx) 6E001. 

(xxxi) 6E002—‘‘Technology’’ 

according to the General Technology 

Note for the ‘‘production’’ of equipment 

specified by the 6A or 6B provisions 

described in this Supplement. 

(7) Category 7 

(i) 7D002. 

(ii) 7D003.a. 

(iii) 7D003.b. 

(iv) 7D003.c. 

(v) 7E001. 

(vi) 7E002. 

(8) Category 8 

(i) 8A001.b to .d. 

(ii) 8A002.b—Systems specially 

designed or modified for the automated 

control of the motion of submersible 

vehicles specified by 8A001.b through 

.d using navigation data having closed 

loop servo-controls and having any of 

the following: 

(A) Enabling a vehicle to move within 

10 m of a predetermined point in the 

water column; 

(B) Maintaining the position of the 

vehicle within 10 m of a predetermined 

point in the water column; or 

(C) Maintaining the position of the 

vehicle within 10 m while following a 

cable on or under the seabed. 

(iii) 8A002.h and .j. 

(iv) 8A002.o.3. 

(v) 8A002.p. 

(vi) 8D001—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment in 8A001.b 

to .d, 8A002.b (as described in this 

Supplement), 8A002.h, 8A002.j, 

8A002.o.3, or 8A002.p. 

(vii) 8D002. 

(viii) 8E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of 

equipment specified by 8A001.b to .d, 

8A002.b (as described in this 

Supplement), 8A002.h, 8A002.j, 

8A002.o.3, or 8A002.p. 

(ix) 8E002.a. 

(9) Category 9 

(i) 9A011. 

(ii) 9B001.b. 

(iii) 9D001—‘‘Software’’ specially 

designed or modified for the 

‘‘development’’ of equipment or 

‘‘technology,’’ specified by 9A011, 

9B001.b. 9E003.a.1, 9E003.a.2 to a.5 or 

9E003.a.8 or 9E003.h. 

(iv) 9D002—‘‘Software’’ specially 

designed or modified for the 

‘‘production’’ of equipment specified by 

9A011 or 9B001.b. 

(v) 9D004.a and .c. 

(vi) 9E001. 

(vii) 9E002. 

(viii) 9E003.a.1. 

(ix) 9E003.a.2 to a.5, a.8, .h. 

Supplement No. 7 to Part 774—Very 

Sensitive List 

Note to Supplement No. 7: While the items 

on this list are identified by ECCN rather 

than by Wassenaar Arrangement numbering, 

the item descriptions are drawn directly from 

the Wassenaar Arrangement’s Very Sensitive 

List, which is a subset of the Wassenaar 

Arrangement’s Sensitive List. If text 

accompanies an ECCN below, then the Very 

Sensitive List is limited to a subset of items 

classified under the specific ECCN or has 

differing parameters. 

(1) Category 1 

(i) 1A002.a. 

(ii) 1C001. 

(iii) 1C012. 

(iv) 1E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of 

equipment and materials specified by 

1A002.a, 1C001, or 1C012. 

(2) Category 5—Part 1 

(i) 5A001.b.5. 

(ii) 5A001.h. 

(iii) 5D001.a—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment, functions 

or features specified by 5A001.b.5 or 

5A001.h. 

(iv) 5E001.a—‘‘Technology’’ 

according to the General Technology 

Note for the ‘‘development’’ or 

‘‘production’’ of equipment, functions, 

features or ‘‘software’’ specified by 

5A001.b.5, 5A001.h, or 5D001.a. 

(3) Category 6 

(i) 6A001.a.1.b.1—Systems or 

transmitting and receiving arrays, 

designed for object detection or 

location, having a sound pressure level 

exceeding 210 dB (reference 1 mPa at 1 

m) and an operating frequency in the 

band from 30 Hz to 2 kHz. 

(ii) 6A001.a.2.a.1 to a.2.a.3, a.2.a.5, or 

a.2.a.6. 

(iii) 6A001.a.2.b. 

(iv) 6A001.a.2.c—Processing 

equipment, specially designed for real 

time application with towed acoustic 

hydrophone arrays, having ‘‘user 

accessible programmability’’ and time or 

frequency domain processing and 

correlation, including spectral analysis, 

digital filtering and beamforming using 

Fast Fourier or other transforms or 

processes. 

(v) 6A001.a.2.e. 

(vi) 6A001.a.2.f—Processing 

equipment, specially designed for real 

time application with bottom or bay 

cable systems, having ‘‘user accessible 

programmability’’ and time or frequency 

domain processing and correlation, 

including spectral analysis, digital 

filtering and beamforming using Fast 

Fourier or other transforms or processes. 

(vii) 6A002.a.1.c. 

(viii) 6B008. 

(ix) 6D001—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment specified by 

6B008. 

(x) 6D003.a. 

(xi) 6E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ of equipment or 

‘‘software’’ specified by the 6A, 6B, or 

6D provisions described in this 

Supplement. 

(xii) 6E002—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘production’’ of equipment specified by 

the 6A or 6B provisions described in 

this Supplement. 

(4) Category 7 

(i) 7D003.a. 

(ii) 7D003.b. 

(5) Category 8 

(i) 8A001.b. 

(ii) 8A001.d. 

(iii) 8A002.o.3.b. 

(iv) 8D001—‘‘Software’’ specially 

designed for the ‘‘development’’ or 

‘‘production’’ of equipment specified by 

8A001.b, 8A001.d, or 8A002.o.3.b. 

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22740 Federal Register / Vol. 78, No. 73 / Tuesday, April 16, 2013 / Rules and Regulations 

(v) 8E001—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘development’’ or ‘‘production’’ of 

equipment specified by 8A001.b, 

8A001.d, or 8A002.o.3.b. 

(6) Category 9 

(i) 9A011. 

(ii) 9D001—‘‘Software’’ specially 

designed or modified for the 

‘‘development’’ of equipment or 

‘‘technology’’ specified by 9A011, 

9E003.a.1, or 9E003.a.3.a. 

(iii) 9D002—‘‘Software’’ specially 

designed or modified for the 

‘‘production’’ of equipment specified by 

9A011. 

(iv) 9E001—‘‘Technology’’ according 

to the General Technology note for the 

‘‘development’’ of equipment or 

‘‘software’’ specified by 9A011 or this 

Supplement’s description of 9D001 or 

9D002. 

(v) 9E002—‘‘Technology’’ according 

to the General Technology Note for the 

‘‘production’’ of equipment specified by 

9A011. 

(vi) 9E003.a.1. 

(vii) 9E003.a.3.a. 

Kevin J. Wolf, 

Assistant Secretary of Commerce for Export 

Administration. 

[FR Doc. 2013–08352 Filed 4–15–13; 8:45 am] 

BILLING CODE 3510–33–P 

DEPARTMENT OF STATE 

22 CFR Parts 120, 121, and 123 

RIN 1400–AD37 

[Public Notice: 8269] 

Amendment to the International Traffic 

in Arms Regulations: Initial 

Implementation of Export Control 

Reform 

AGENCY: Department of State. 

ACTION: Final rule. 

SUMMARY: As part of the President’s 

Export Control Reform (ECR) effort, the 

Department of State is amending the 

International Traffic in Arms 

Regulations (ITAR) to revise four U.S 

Munitions List (USML) categories and 

provide new definitions and other 

changes. Additionally, policies and 

procedures regarding the licensing of 

items moving from the export 

jurisdiction of the Department of State 

to the Department of Commerce are 

provided. The revisions contained in 

this rule are part of the Department of 

State’s retrospective plan under E.O. 

13563 completed on August 17, 2011. 

DATES: This rule is effective October 15, 

2013. 

ADDRESSES: The Department of State’s 

full plan can be accessed at http:// 

www.state.gov/documents/organization/ 

181028.pdf. 

FOR FURTHER INFORMATION CONTACT: Ms. 

Candace M. J. Goforth, Director, Office 

of Defense Trade Controls Policy, 

Department of State, telephone (202) 

663–2792; email 

DDTCResponseTeam@state.gov. ATTN: 

Regulatory Change, First ECR Final 

Rule. 

SUPPLEMENTARY INFORMATION: The 

Directorate of Defense Trade Controls 

(DDTC), U.S. Department of State, 

administers the International Traffic in 

Arms Regulations (ITAR) (22 CFR parts 

120–130). The items subject to the 

jurisdiction of the ITAR, i.e., ‘‘defense 

articles’’ and ‘‘defense services,’’ are 

identified on the ITAR’s U.S. Munitions 

List (USML) (22 CFR 121.1). With few 

exceptions, items not subject to the 

export control jurisdiction of the ITAR 

are subject to the jurisdiction of the 

Export Administration Regulations 

(‘‘EAR,’’ 15 CFR parts 730–774, which 

includes the Commerce Control List 

(CCL) in Supplement No. 1 to part 774), 

administered by the Bureau of Industry 

and Security (BIS), U.S. Department of 

Commerce. Both the ITAR and the EAR 

impose license requirements on exports, 

reexports, and retransfers. Items not 

subject to the ITAR or to the exclusive 

licensing jurisdiction of any other set of 

regulations are subject to the EAR. 

All references to the USML in this 

rule are to the list of defense articles 

controlled for the purpose of export or 

temporary import pursuant to the ITAR, 

and not to the defense articles on the 

USML that are controlled by the Bureau 

of Alcohol, Tobacco, Firearms and 

Explosives (ATF) for the purpose of 

permanent import under its regulations. 

See 27 CFR part 447. Pursuant to section 

38(a)(1) of the Arms Export Control Act 

(AECA), all defense articles controlled 

for export or import are part of the 

USML under the AECA. For the sake of 

clarity, the list of defense articles 

controlled by ATF for the purpose of 

permanent import is the U.S. Munitions 

Import List (USMIL). The transfer of 

defense articles from the ITAR’s USML 

to the EAR’s CCL for the purpose of 

export control does not affect the list of 

defense articles controlled on the 

USMIL under the AECA for the purpose 

of permanent import. 

Export Control Reform Update 

Pursuant to the President’s Export 

Control Reform (ECR) initiative, the 

Department has published proposed 

revisions to twelve USML categories to 

create a more positive control list and 

eliminate where possible ‘‘catch all’’ 

controls. The Department, along with 

the Departments of Commerce and 

Defense, reviewed the public comments 

the Department received on the 

proposed rules and has, where 

appropriate, revised the rules. A 

discussion of the comments is included 

later on in this notice. The Department 

continues to review the remaining 

USML categories and will publish them 

as proposed rules in the coming months. 

The Department intends to publish 

final rules implementing the revised 

USML categories and related ITAR 

amendments periodically, beginning 

with this rule. 

Pursuant to ECR, the Department of 

Commerce, at the same time, has been 

publishing revisions to the EAR, 

including various revisions to the CCL. 

Revision of the USML and CCL are 

coordinated so there is uninterrupted 

regulatory coverage for items moving 

from the jurisdiction of the Department 

of State to that of the Department of 

Commerce. For the Department of 

Commerce’s companion to this rule, 

please see, ‘‘Revisions to the Export 

Administration Regulations: Initial 

Implementation of Export Control 

Reform,’’ elsewhere in this edition of 

the Federal Register. 

Changes in This Rule 

The following changes are made to 

the ITAR with this final rule: (i) 

Revision of USML Categories VIII 

(Aircraft and Related Articles), XVII 

(Classified Articles, Technical Data, and 

Defense Services Not Otherwise 

Enumerated), and XXI (Articles, 

Technical Data, and Defense Services 

Not Otherwise Enumerated); (ii) 

addition of USML Category XIX (Gas 

Turbines Engines and Associated 

Equipment); (iii) establishment of 

definitions for the terms ‘‘specially 

designed’’ and ‘‘subject to the EAR’’; (iv) 

creation of a new licensing procedure 

for the export of items subject to the 

EAR that are to be exported with 

defense articles; and (v) related 

amendments to other ITAR sections. 

Revision of USML Category VIII 

This final rule revises USML Category 

VIII, covering aircraft and related 

articles, to establish a clearer line 

between the USML and the CCL 

regarding controls over these articles. 

The revised USML Category VIII 

narrows the types of aircraft and related 

articles controlled on the USML to only 

those that warrant control under the 

requirements of the AECA. Changes 

include moving similar articles 

controlled in multiple categories into a 

single category, including moving gas 

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